CHAPTER TWO
2.1. REVIEW OF RELATED LITERATURE
Taxation is one of the major fiscal policies the government of any
nation such as Nigeria can use to achieve economic stability and in the
financing of capital expenditure. Various taxes are levied upon the
income, wealth or gain of an individual, family and business firm by the
government for the purpose or benefits of the general public.
Tax by a simple definition is a financial charge or other levy
imposted upon a tax payer which could be an individual or a legal entity
from the point of view of the student researcher by a state such that
failure to pay is punishable by law. Thus, taxation cannot be regarded
as a voluntary payment or donation but an enforced contribution exacted
pursuant to legislative authority. In modern taxation system such as
Nigeria, taxes are levied, in money which could be use for myriads of
functions or purpose such ay a expenditure on public order, protection
of lives and property, economic infrastructure cures such as roads,
public works, social engineering and the operation of government
itself (Carrol, et al 2000).
The taxes collected by the government no doubt emanate from varying
sources ranging from personal income tax, company income tax, capital
gain tax, property tax, education, tax, task but to list a few.
The Nigerian government in attempt to raise revenue and enhance the
economic development of Nigeria has subjected many firms to multiple
taxations which they are mandated or made compulsory to pay irrespective
of the sector the business firms operate or else take the wrath of the
law A survey carried out by the Manufacturers Association of Nigerian
(MAN1) and (Centre for International Private Enterprise ICIPE)
identified multiple taxation as the bane of private sector business
growth in Nigeria (Anyamvu, 2012). The survey established the
relationship between multiple taxations in the pilot state across the
three tiers of government and re-affirmed its negative effects to
private sector growth and businesses in Nigeria.
According to the survey, it was established that multiple taxation
could lead to divestment as well as jeopardize foreign direct investment
coming into Nigeria, while adversely affecting the Competitions of
existing businesses and their survival, Moreover it was also
established that currently most businesses in Nigeria consider the tax
environment as unfriendly and disincentive to business, stressing that
it engenders loss of man hour to both the government and private
businesses.
According to Osagie (2012) tax environment inNigeria especially the
policy on multiple taxation increases the cost of doing business in the
country. As a matter of fact, some business including manufacturing
companies have shut down production while in some cases, have relocated
their factories to other West African countries which are considered to
be more investment friendly. Against this back drop, this project
examines the effects of multiple taxation on business survival in
Nigeria.