Effective Utilization Of Tax Revenue In Nigeria

This paper is an attempt to examine the effective utilization of tax revenue vis-à-vis the impact of Government expenditure on economic growth and development of Nigeria. Government intervenes in the economy through a variety of policies, of these policies, two are most important. They are fiscal and monetary policy. This work is on the expenditure component of fiscal policy. Until recently, Nigeria has been one of the most disappointing development stories of the modern era-a cautionary tale of the risk of huge revenue from taxation in an environment of weak governance. In recent years, the most conspicuous fact about Nigeria’s economy is that corruption and mismanagement of its post- colonial government has prevented the channeling of the country’s resources from taxation and other sources into lasting improvements in infrastructure and the construction of a sound base for self sustaining economic development. Thus despite increasing revenue base, the rate of poverty, unemployment, high rate of inflation, low capacity utilization in industry, debt overhang, deterioration or stagnation of economic activities still prevail. From the foregoing, it should be clear what need to be done to improve the effective utilization of government fiscal (spending) operations by: improving the quantity and quality of resources available to the government for its activities and improve the ways in which the resources available to the government are managed through the application of cost benefit analysis, expenditure analysis, transparency and accountability in the conduct of government business and also ensuring at all times that people of doubtful character are not elected into government or are not entrusted with the management of public resources. Avoiding actions that induce government officials to behave in corrupt ways and been genuinely interested in what government is doing. That is been critical in the activities of government.