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Taxation is a major instrument for the conduct of both developed and developing countries. Taxation is known to accomplish a number of objectives revenue generation for government, economic stabilization and income re-distribution. Taxation as an instrument of public policy is essentially concerned with the manipulation of financial operations of both the government anti private sectors with a view of furthering certain economic objective. In Nigeria these economic objectives includes the attainment of appreciable level of full employment, avoidance of excessive inflation, achievement of satisfactory balance of payment position. Appreciable increase in the national income and a reduction of extreme inequality among the citizens, provision of other essential necessities of life like water, school building of bridges roads and others.

The question now arises, how does the finding of these activities come about? The government can only discharge these duties by generating enough revenue to provide enough finance for the accomplishment of these tasks ahead and the board of internal revenue is by law charged with the responsibility for assessing, collection and accounting of all taxes in Enugu state. The government to  the individual and payable to the economic and social responsibilities define taxation as a compulsory levy. In Simon’s income tax (1852)

Lord Maccnaghtenguoted “income tax is a on income. Its not meant to be tax on anything else”. Dalton (2014) defined tax as a compulsory contribution imposed by a public authority irrespective of service rendered in return. Income tax law and practice byNjokamma. C.A. defined income tax as a creative of status. In interpreting its provisions. “No equity, no intendment” or anything else should be implied. The clean terms of the law should be applied but not necessarily restricted against the revenue. Nevertheless tax is not the only sources government revenue other sources include.

Fines and fees

Motor licensing fees

Interest and repayments

Dividends and royalties on government

Share holdings


State share of federal government disbursement loans and grants

School fees

Hospital fees

Revenue from government  parastatals like the water co-operation department. The private sector is not left out in the fund generation do their own fund comes inform of borrowing private savings etc. The absence of well-organized and locally controlled money most markets for borrowing has faced private sectors in most developing countries especially Nigeria to rely primarily on fiscal measures to mobilize domestic monetary resources for revenue generation. For instance if profits of taxation, the marginal efficiency of investment will decline and consequently a fall in investment is observed the other hand if profit of investment are increased through low tax rate the marginal efficiency of investment will in investment is observed.

However Duke man (2012) said that for an effective tax system that encourages investment, has to some extent be based on high rates, a fact peculiar with the paradox of investment stimulating taxation, and as well discrimination, so long as it is significantly qualitative and psychologically substantial. This suggestion may not augur well for investment activity where retained profits and savings form the bank of capital formation. Realizing the important to finance as the train wires of economic growth the government initiates financial policies through annual budgets extension services for these business enterprises and also through several government financial enterprises.

We are now convinced that of all these source of revenue by government that contributes the largest proportion. With charges in these consideration above attention have been focused on the fiscal policy best suited to the economic development of the country. As part of the search for desirable fiscal policies high consideration is placed on the value of goods and services payable by the final consumers. The collections of this tax accountable to the federal government by VAT is collected from.

Nevertheless the implementation of various government measure the their effects are most times, at variance with the objective of government. Some of the revenue collection agencies are either ill equipped to carry out their functions effectively or equipped with personal of dubious character who trust laudable objectives of the government. Most  taxpapers don’t pay willingly, some take laws into their hands to either evade or avoid tax will others collide with some tax official as well as employ the services of tax experts to explore the tax lopphole. As  a result of such ill activities towards taxation there is always a short fall in the government projected revenue.

In view of the importance to taxation as a principle source o government revenue as well as a powerful instrument in the conduct of public policies. This study is aimed at exploring all avenues of tax collection in Enugu state and the performance of the Enugu state board of internal revenue to keep the flag flying in support of the topic to the study that taxation is a major source of government revenue.


Tax constitutes the greater percentage of internally generated revenue in Enugu state and a well the major source of revenue for the government financing its activities. Tax however has its fundamental problems in the area of administration and management. There is deficit in planning, control and adequate information flow of tax collection generally. Since the government financial policy and objectives is to ensure adequate revenue and conducive environment for the people’s satisfaction through progressive taxation and other fiscal measures designed to end the rapid growth and development of the society for the benefit of the citizenry.

It is therefore necessary the these avenues of fun are solidified. But on the other way round the implementation of the government taxation policy and the realization of the taxation goal most a times run at variance with the policy outlined in the annual as well as the tax laws provision. Many individuals as well as organization see taxation policy as being harsh and unfavouable.  They argue that while few enterprises especially large company continues to benefit from the government support through grants, subsidies and other tax incentive. Others find the policies unbearable a result any little opportunity by such people to evade or avoid tax is highly utilized.

The results of all these tax evasion and avoidance are that less revenue that envisage is collected through tax by the government and thereby less social amentias than proposed are carried out. These problem will be solved as soon as an efficient machinery is set in motion for effective administration and review of state tax laws if made or amended.


This research work titled “ Taxation as a major source of government funds and the impact on management decision making” with particular reference to Enugu state board of internal revenue, is aimed at:

1.  Examining the impact of taxation on management decision making.

2. To evaluate the role of taxation in the development of Nigeria, Enugu state in particular.

3.  Determining the various problems associated taxation in Enugu state.

4.  And also proffer possible solutions to the problems identified.


The researcher formulated the following research question:

1.  What are the impacts of taxation on management decision making?

2.  What are the roles of taxation in the development of Nigeria, Enugu state in particular?

3.  Is there any problem associated taxation in Enugu state?

4.  What are the possible ways of solving the problems of taxation in Enugu state?


For the researcher to carry out extensive study on the subject matter, the following research hypothesis were formulated:

Ho: Taxation does not have any impact on management decision making.

H1: Taxation has significant impact on management decision making.

Ho: taxation has not played any role in the development of Nigeria, Enugu state in particular.

H1: Taxation has played so many roles in the development of Nigeria, Enugu state in particular.


This research work will be of immense help to

The Researcher: it will help the researcher to know more on the importance of Taxation as a major source of government funds and the impact on management decision making. It will also be of great importance to stake holders as it will enrich their knowledge on the benefits and usefulness of the tax paying by individuals and organizations. This study will be of great importance to the country Nigeria as it will help the policy makers to prorogate laws that will guide the collection and taxation in Nigeria as a major source of revenue for the government.


The study shall focus on Taxation as a major source of government funds and the impact on management decision making with specific reference to Enugu state board of internal revenue. The researcher in carrying out this study encountered numerous problems, which includes:

FUND – This included lack of enough fund to move around and visit the organizations, the researcher has to visit the organizations more than two times, the researcher equally needed enough money to source material which constitutes an impediment. High cost of transportation in the city due to long distance also imposed its own limitation on the researcher.

LACK OF RESEARCH MATERIALS: lack of research materials was also one of the problems faced by the researcher in the cause of this research work.

RESPONDS OF THE RESPONDENTS: Another constraint to the researcher is that some of the respondents found it difficult to express their view with regards to the subject matter.

From the above points the researcher tried his best to bring out in detailed study on taxation as a major source of government funds and the impact on management decision making but the above constraints have limited the researcher to only Enugu state board of internal revenue.


Some of the terms used during this research, which have special application to study are defined:

Revenue: This is the gross receipt or receivable of a governmental unit derived from taxes, custom and other main source of government revenue but excluding appropriation and allotment from the consolidated revenue fund (CRF)

Tax: The oxford advanced learners dictionary of current EnglishDefines tax as “(sum of money purchase etc) to the government for public purpose”. Tax can also be defined as a compulsory levy by natural or cooperate, payable to the government for the benefit of the citizenry.

Tax Assessment: the calculation the tax due to the paid by an individual.

Zonal Tax Authorities: these are senior tax officer charged with assessing and collecting of tax within their zone.

Tax Law: Theses are laws made by the government prone to review as well giving the guidelines and draft on how and paid. These laws are standard guiding all the tax offices in the federation. Example are ITMA 1961 income tax management act 1991 etc. income management act (ITMA). These are laws committee guiding the collection and payment of tax in Nigeria.


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