The impact of indirect taxes as instruments of economy development which has been a major concern to both tax prayers and collectors however, inspires research studies. Based on this premise, questionnaires were developed and administered to treasures, accountants, bankers as well as the joint tax Board, in addition to interviews being conducted.
Not only these, analysis of data employed were basically simple percentage methods. And the result revealed that although indirect taxes served as instruments of developing the economy rather, lots of pitfalls are likely to occur both in the manufacturing and consumption process.
Against these back drops, tax official should be properly trained in matters relating to taxation.

CHAPTER ONE: INTRODUCTION

1.0 INTRODUCTION
1.1 GENERAL OVERVIEW OF THE STUDY
Before the advent of industrial revolution of the seventeenth century which opened the way to industrialization, the discoveries of natural resources including. Crude oil, gold, diamond, gas and the development of technology greatly advanced the diversification of the sources of government’ revenues for the development of the economy. Despite the fact that developing economies are endowed with natural resources with a greater percentage of the revenue of the government emanated from hence, taxation still remains major revenue needed for the development of the economy. In addition, agricultural products, the major source of nation’s foreign earnings also account for a large percentage of government revenues, all of which aimed at economy development of the country. This is because their output is subject to a number of taxes which include exports duty levied proportionally to the value of exports as well as produce sales or purchases tax on volume of produce offered for sale. And the proceed is used to provide for collective wants-education, defense, utilities, health services, social amenities, e.t.c.
On the other hand, consequent upon controversies trailing paucity of funds resulting from bad elements in the administrative structure of taxation, it is hard put to ascertain the extent to which indirect taxes, have impacted to the development of the economy, irrespective of the fact that statutory allocation from federation. Account, another source of government income has greater impacts on the economy development hence, the need for this write ups.

1.2 STATEMENT OF THE PROBLEMS
This work is geared towards ascertaining the extent to which indirect taxes as a source of government revenue have impacted on the development of the economy. It is also difficult to ascertain what impact/ effect if any, does indirect taxes got to do with developing the economy considering greater diversities in government, management abilities.
Furthermore, do governments use proceeds obtained from indirect taxes alone to develop the economy other than other sources?
Lastly, all governments including developed and developing countries of the world still impose different kinds of taxes on her citizens, not withstanding the fact that there are several other sources in which revenues are accrued.

1.3 OBJECTIVES OF THE STUDY
The objectives of the study among other things include: The extent to which any government can effectively and efficiently discharge as well as shoulder her responsibilities to her citizens in proportion to revenue derived from indirect taxes.
To daro (1977: 366), shared the same view when he said that the main objective of taxation is for the mobilization of resources to finance public expenditure. According to him, “the prevailing political or economic progress depends largely on the government’s ability to generate adequacy and sufficiency revenue to finance an expanding programme of essential, non revenue yielding public services as health, education, transportation communication and other components of the economic and social infrastructure. In the words of Nsofor (Mr.) (2006:2), the purpose of taxation be it direct or indirect taxes is to provide for collective wants, as earlier pointed out and also to provide a tool for government economic policies such as combating inflation, influencing the level of economic activities, effecting the mobilization of economic sources, redistribution of wealth, obtaining changes in he country’s balance of payments, e.t.c. On the other hand, Media reports had it that “since indirect taxes are levied on goods and services produced without the country, they may not be the effective instruments of developing the economy coupled with the attendance negative effects such as:

• It would not lead to higher cost of production but would also result in increases in the volume of un sold goods with its attendant reduction in capacity utilization.
• Increasing the rate of unemployment and exacerbating poverty in the country.
• It would increase inflationary rate as local and foreign investors currently operating in the economy would find the environment more economically volatile than ever.

1.4 SCOPE OF THE STUDY
This study portrays the impacts of indirect taxes, a tool for the development of the economy various sources of government revenues, various processes of tax collection and administration, among others.

1.5 RESEARCH QUESTIONS
The following research questions were formulated to further direct investigations.

• Does the government develop her economy using the proceeds of indirect taxes other than other sources?
• Does the proceeds derived from indirect taxes have any impacts on the economy either positively or negatively?
• Does the government determine and base the distribution of projects for execution on the sectoral revenue source/returns

1.6 SIGNIFICANCE OF RESEARCH
Indirect taxes are administered by any government as a source of raising funds towards the revenue requirements of the government for purposes of carrying out such services required of it by her citizens, to include: Providing security and maintaining degree of decency towards her citizens. Thus, the significance of this project lies in tracing the extent to which indirect taxes go along way to achieving the aforementioned obligations.

1.7 LIMITATION OF THE STUDY
The researcher broadly examines the research topic and then channeled it to state governments as lots of constraints were encountered by the researcher in the course of study.
However, the major constraints are enumerated below:-
Time: This was a major constraints in that the work had to be handled in addition to the academic requirements of the institution coupled with the dead lines of submission and defense of the whole project work.
Finance: The cost of gathering and analysis data obtained from primary and secondary sources, typing and binding as well as other indirect expenses incurred posed a problem towards the successful completion of this work.

1.8 DEFINITION OF TERMS
Technical terms have been fore closed in the course of this study so as to aid easier understanding of this work. However, the researcher considers some terms too important for purposes of clarification and precision, and they are defined in a Lucid language to include:-
Appeals: These are objections made in writing to tax authorities within 21 days after the date of services of the assessment.
An Appeal Commissioner: The main function of an appeal commissioner is to hear appeals from tax payers in any term where it is situated. Unlike the inspectors and collectors of taxes, an appeal commission is not civil servant.
Chargeable Tax: It is the net chargeable income in which tax is payable. It is arrived at by deducting personal relief in respect of wives children, e t c from the total assessable income.
Indirect Taxes: There are taxes levies on goods and services. Here the burden of taxation falls on producers and sellers before it is shifted to the ultimate consumers inform of higher prices of consumable goods. Import duties, excise duties and advalorem tax are said to be examples of indirect taxes.
Value Added Tax (VAT): As introduced in Nigeria by decree No. 102 of 1993, it is a tax system imposed at each stage of production of goods and services.
Tax Collectors: They have hands in the administration of tax laws. Preserve return of income tax, form notice of assessment.
Tax Inspectors: They are under the control of board of in land revenue. Their functions include:

• Receiving returns and other information from tax payers, other sources, etc.
• To track down tax evasion and act as advisers to tax payers.

They also perform such other functions as may be specified by decree establishing it from time to time.

• Tax Avoidance: This involves attempts by the tax payer to reduce the amount of tax payable by exploring the loop holes or flaws in the tax laws and policies of the country.
• Tax Evasion: Unlike tax avoidance, tax evasion is the deliberate attempt by the expected tax payer not to pay tax.
• Emolument: This means money paid to some body for work they have done.
• Advalorem Tax: This is a tax imposed as a percentage of the value of the commodity.
• Taxation: This is the process of being tax. It is defined as the transfer of resources from the private to public sector in order to accomplish some of the economic and social goals of the government.
• Proportional Tax: This is the tax which takes the same percentage of one’s income as tax irrespective of the size or level of income.
• Progressive Tax: A tax is said to be progressive, when the rate of tax increases as one’s income increases. In other words, the higher one’s income increases. In other words, the higher one’s income, the higher the rate of tax to be paid.
• Regressive tax: This is the opposite of progressive, which implies that the poor are called upon to make greater sacrifice than the rich. Put differently, in regressive tax systems, the lower income earners pay higher than the affluent income groups.
• Relief’s and Allowances: These are approved deductions granted to tax payers from the total assessable income.
• Personal Allowance: Here, every tax payer whether married or single is entitled to an allowance of say, five thousand naira only plus 20 percent of earned income usually from trade, profession and other incomes from employment.
• Rent Allowance: This allowance is granted to persons in employment in respect of rent allowance paid to him by their employers.
• Tax Rates: This is the amount per a band of taxable income usually stated in percentage.
• Life Assurance Relief: Here allowances are given in respect of premiums paid by the tax payer on policies taken on the life of the tax payers or spouse. To be allowed, the policy must be on the life of the tax payer or spouse and no one else.
• Child Allowance: This is cleaned by the spouse who maintained the child, usually the husband. On the other hand, the wife may be permitted to claim on a written declaration by the husband.