COMPANY INCOME TAX AND INFRASTRUCTURE DEVELOPMENT IN NIGERIA: A PRE AND POST REFORM ANALYSIS

Abstract

Taxation is important in the planning of savings and investments and by harmonizing it with development strategy and changing economic structure. The government uses taxation as a powerful fiscal weapon to plan and develop a country. According to Soyode and Kajola (2006), government had always used taxation not only to raise money to run the business of government but also as an important fiscal tool for economic development and the alleviation of poverty. There is therefore need to have in place a strong and a vibrant tax system not only at the Federal level but also at the state and local government levels, so as to ensure that the objectives of tax are achieved. Over the years, it has been observed that Nigeria’s fiscal policies are dynamic and her expenditure increases in response to the needs of the society while her revenue does not increase in the same proportion as a result of poor tax administration, (Phillips, 1977). As a result of this, Nigerian tax system is dynamic and is continually changing to meet the needs of the constituents of the society, hence the need for tax reform in Nigeria. Tax is dynamic, so reforms are necessary to effect the required changes in the national economy, (Ola, 2001). Azubuike (2009) observed that tax reform is an ongoing process with tax policy makers and tax administrators continually adopting the tax systems to reflect changing economic, social and political circumstances in the economy. The definition of economic development given by Michael Todaro is an increase in living standards, improvement in self-esteem made and freedom from oppression as well as a greater choice