The main purpose of this study is to investigate the impact of taxation on economic development of Ondo State: A case study of Ministry of Finance and Economic Planning, Akure.  The research methodology used for the collection of the data include an extraction of data on revenue generated from taxation in the Ministry of Finance and Economic Planning and also, through the use of questionnaires.  From the Findings, it was found that taxation has both positive and negative impact on the economy depending on the prevailing condition.  Also, taxation is the major source of government revenue.  Through the revenue generated from taxation, government was able to carry out her expenditure functions for the benefit of its citizens and growth of the Economy.
The following recommendations were made based on the findings of this research work:
·                    Government should educate the public on the importance of taxation and its benefit to the people.
·                    Government should ensure that the money collected is used for the provision of service and social amenities to the paying community.  This will encourage them to pay their taxes as at when due.
·                    Government should also give incentive to business organization in form of tax holiday.

Title page                                                                           
Table of contents                                                                   
1.0            INTRODUCTION                                                               
1.1            Background of the study                                                     
1.2            Statement of the Problem                                            
1.3            Objectives of the study                                                 
1.4            Research Questions                                                  
1.5            Significance of the study                                                        
1.6            Scope of the study                                                               
1.7            Definition of Terms                                                     
2.0            LITERATURE REVIEW                                             
2.1            Definition of Taxation                                                  
2.2            Classification of Taxes                                                
2.3            Systems of Direct taxes                                                
2.4            The principles of a good tax system                                      
2.5            The incidence of taxation                                                    
2.6            Advantages and Disadvantages of direct                      
2.7            Advantage of Indirect taxes                                          
2.8            Disadvantages of indirect taxes                                              
2.9            Problem of tax collection in West African Countries    
2.10       Impact of taxes                                                            
2.11       Tax Policy Objective and its benefits on the
economic development                                                
3.0            METHODOLOGY                                                       
3.1            Research Design                                                           
3.2            Population of the study                                                
3.3            Sample and sampling technique                                   
3.4            Research Instrument                                                    
3.5            Administration of the Instrument                                
3.6            Data Analysis                                                              
4.0            Results and Discussions                                                        
5.1            Summary                                                                     
5.2            Conclusion                                                                    
5.3            Recommendation                                                         
1.0            Introduction
1.1            Background to the study
Taxes are levied on almost every country of the world, primarily to raise revenue for government expenditures.  Although they serve other purposes as well.  Government expenditure may be classified into two groups based services provided.  There are recurrent expenditure and capital expenditure capital expenses can be defined as expenses on goods whose services are rendered over a long period of time.  They include expenses on roads, publications, utilities etc these projects provide service for many years and are usually paid over a long period of time.  Recurrent expenses are usually met form two main sources, taxation and miscellaneous Receipts.  Taxation includes custom duties, excise duties, purchase tax, income tax, corporation duties, profit tax etc while miscellaneous receipt proceeds from licenses, fines and trading activities of the government, capital expenses are financed mainly from borrowing, budget surpluses and from grant and aid in modern economy, taxes are the most important source of government revenue.  Taxes differ from other sources of government revenue simply because they are compulsory levies and are unrequited, that is they are not paid in exchange for some specific things such as the sale of public debt.  While taxes are presumably collected for the welfare of tax payers as a whole, the liability of the individual tax payers is independent of any benefit received.  There are important exceptions to this characteristics, pay roll taxes are commonly levied on labour income in order to finance retirement benefits, medical payments and other social security programmes.
Taxation can be define as the money imposed or levied by the government on her citizens in order to generate funds so as to meet the expenditure or to distribute income.  Taxes are levied so as to accomplish some of the nations Economic and Social objectives.  Taxes have been a major subject of political controversy throughout history even though they constitute a sizable share of national income.  Introduction of taxation in Nigeria was dictated by the financial needs of the colonial administration.  Custom duties; as against direct taxes were first introduced in the south.  The northern territory was a convenient place to experiment the system of direct.  Taxation because the people of the area were used to payment of tax under the Fulani’s administration and also because the Muslim religion adhered to by the people approved taxation as being consistent with the tenets of Islam.  Direct tax was introduced in the north in 1904. Two years after, the amalgamation of the north and south in 1914 led to direct taxation being introduced in the western territory in 1916. The Yoruba and Benin who were predominant in the area already had well established tax system of administration before the advent of British administration.  In the middle ages, many of these ancient taxes especial among the direct levies vanished and gave way to a varieties of obligatory services and system of aids most of which amounted to gifts.  The main indirect taxes transit entries and market fees.  Taxes today are collected in money of in goods.  Government imposed taxes to raise enough revenue only to cover the cost of administration and defence.  As time went on, it was realized that defence expenditure could not be adequately provided by the state, individuals, kings and emperors.  The state must provide security and must prohibit those activities either by individual or group within the society.  To provide for these services.  Government began to raise money inform of taxes.  Hence, taxes could be regarded as payment for services rendered by the government.  Most countries expended on social services particularly education, heath services, pension scheme and housing.  As new development projects were created the government needed increase its recurrent expenditure.
1.2            Statement of the Problems
It has been observed that wrong declaration of income is very rampant among self – employed citizen.  Also there is general ignorance of important of tax and therefore the essence of tax payment is not clear to must of the workers in Ondo State.
1.3            Objectives of the study
This project is aimed at studying the impact of Taxation on Economic Development of Ondo State. (A case study of ministry of finance and economic planning).
The specific objectives of the study are:
1)                To identify the various types of taxes
2)                To analyze the revenue generated by government from taxation in Ondo State.
3)                To evaluate the impact of taxes on the economic develioment of Ondo State.
4)                To offer suggestion for overcoming some of the problems attributed to collection of taxes.
5)                To highlight the benefits that will be derived from revenue generated through taxation.
1.4            Research Questions
a)                 Do the proceeds realized from taxes help in the economic development of Ondo State?
b)                Does taxation bridge the gap between the rich and the poor?
c)                 Does taxation have any impact on the economy of the payers in Ondo State?
d)                Does the government generate its income mainly through taxation?
1.5            Significance of the study
The findings and recommendations of this study will be of immense assistance to the government and tax collectors in Ondo State.
1.6            Scope of the study
The research is carried out to find out the impact of taxation on Economic development of Ondo State.  Total amount of the money collected from various will be calculated and presented in the table.  Descriptive statistical analysis will be use.
1.7            Definition of Terms
Tax: A tax is a compulsory levy imposed by the government on individual and business firm and paid by them to the government.  INCOME TAX: This is the tax on the income of individual after all allowances have been deducated.  COMPANY TAX: This is the on the property of a company.  PROPERTY TAX: This is the tax on the property value of an asset.  POLL TAX: A poll tax is a flat rate levied on every individual in a country.  DIRECT TAX: A direct tax is a tax levied directly on the income of individual and business firm.  INDIRECT TAX: These are taxes levied on goods and services.  CUSTOM DUTIES: These are taxes levied on goods brought into the country.  EXPORT DUTIES: These are taxes levied on good brought into the country.  PURCHASE TAX: This is an advolarem tax. (i.e. based on the value of commodities generally collected at the whole sale stage.  SALE TAX: It is a tax levied and collected either at a whole sale or retail level.  LICENSE: The use of radio and television set and the sale of drinks attract taxes in the from of license which have to be obtained.  DEATH DUTIES: Taxes on the properties of the deceased. PROGRESSIVE TAX SYSTEM: A tax is said to be progressive if the rate increases as the size of income increases.  REGRESSIVE TAX: A regressive tax takes a small portion of income as income rises in order words, as income increases, the amount of tax paid decreases.  PROPORTIONAL TAX SYSTEM: proportional taxation is the income earners.  Both rich and poor.  TAX EVASION: Tax evasion is a deliberate attempt not pay tax. TAX AVOIDANCE: Tax avoidance is an attempt to exploit the flow or loopholes in the tax with a view to not paying the required tax. TAX INCIDENCE: Tax incidence is the impact of a tax and where the burden of tax finally rests.  EQUITY: The principle of equity demand that equals be treated equally.  CERTAINTY: The tax payers should know when there are due for payment.  ECONOMY: The cost of collecting the tax should be small in relation to the revenue to be generated by the tax.  NEUTRALITY: By neutrality, we mean that a tax system should not distort relative prices in an economy.  ADEQUACY: By adequacy we mean that a good tax system be capable of providing the flow of funds necessary for government operation.  FISCAL POLICY: Fiscal policy is the use of government tax expenditure policies to influence the level of Economy activity.  GOVERNMENT REVENUE: Is the income, which accrues to the government.


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