Effect Of Tax Avoidance And Evasion On Economic Development Of Abia State:- Kalu Oluchi G

ABSTRACT This study examined the effect of tax evasion on the economic development in Nigeria. Three research question and three research hypotheses were formulated to guide the study. Literature were reviewed, cross sectional research design was used to gather information for the study, the sample size was determined using the Taro Yamane sample size determination formula and using multiple regression analysis to analyse the hypotheses. The result shows that changes in tax policy reforms significantly improved GDP, national income and other economic growth indicators during the period of study, especially growth rates of company income tax and personal income tax. Our results show that growth rate of personal income tax has a positive significant effect on the national income and economic growth. The growth components of company income tax and petroleum profit tax are positive but not statistically significant. The leading conclusions from these findings are: (1) changes in tax policy reforms significantly influence the behaviour of national income and GDP; (2) tax policy significantly fosters the growth of national income. Recommendations were made based pn the findings that to ensure an efficient tax system that guarantee sustained economic growth, there should be an improved tax regime that is capable of generating funds for the Government to provide basic social services efforts should be made to address all complexities involving effective tax system such as multiplicity of tax payment by individuals and organizations and government should discourage tax.