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The Impact of Tax Revenue on Economic Growth

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Submitted By Azenabor
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PROPOSAL

INTRODUCTION 1.1 Background of the study
The political, economic and social development of any country depends on the amount of revenue generated for the provision of infrastructure in that given country. However, one means of generating the amount of revenue for providing the needed infrastructure is through a well structured tax system (ogbona and ebimobewei, 2012). The vital role that taxation play in an economy cannot be overemphasized. Tax is a compulsory levy imposed by government or its agent on her citizens in order to raise revenue for the funding of economic activities. Nkoro and worlu, 2012 defined Tax as a fee charged or levied by a government on a product, income, or activity. If it is levied directly on personal or corporate income, it is called a direct tax. If it is levied on the price of a good or service, then it is called an indirect tax. The main reason for taxation is to finance government expenditure and to redistribute wealth which translates to financing development of the country (Musgrave and Musgrave, 2004, Bhartia, 2009). Apart from revenue generation prowess of tax, it is also used by the government to discourage consumption of certain goods. Taxation is a fiscal tool that most government uses to regulate both the micro and macro aspect of an economy. Generally, The importance of tax lies in its ability to generate revenue for the government, influence the consumption pattern of the people and also regulate the economy through its influence on vital aggregate economic variables such as income, employment, prices of goods and services and investments.
The recent shock in world oil prices has made so many oil-dependent nations in the world to adjust their budget for 2015 fiscal year in order to remain afloat. Nigeria is not an exemption from this budget adjustment and readjustment. Countries like Nigeria who is affected by

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