CHAPTER ONE
INTRODUCTION
Background of the study
The global economic recession, which started in 1980’s as a result of decline in the economic growth of industries nation, high rate of inflation, dramatics rise in price of crude oil, increase cost of important a massive building-up of liquidity in the international capital market and unusual fluctuation in commodity prices was not fully felt in Nigeria until 1982, when the developed countries applied a series of restructure monetary and fiscal policies to curtail the a fore-stated problems. Seventeen years ago, precisely in 1983, the world bank report that the continuing recession in the industrial world several constrained developed countries growth in 1982. Weakness in the price of oil created difficulties for oil exporting developing countries’’.
Reporting specifically on Nigeria, the bank stated that“ foreign exchange resource declined in 1982 from a level equivalent to three-month worth. Investment, equal to about a third of gross domestic product (GDP) in 1980 –1981, has been radically reduced as both foreign exchange and government resource contract (85% of government revenue, both federal and states are direct generated from oil export).
An attempt to wriggle the country out of its financial predicament led to the initially of series of belt-tighten measure since 1982 to date. These measures include, ban on import of a large number of goods, specially taxes on luxury goods, enforcement of trick exchanges control reputation liberalized during the earlier boom, wages and ban on employment in the public sector, increased external borrowing in anticipation of oil income and of late the introduction of value added tax (V.A.T). The impact of the dwindling revenues to the federal government and this ever-decreasing portion of statutory allocation to states, has aroused tremendous interest in other source of revenue. Therefore, the hitherto relaxed tax laws are vigorously being enforced while levies of various descriptions are also being in various state of the federation.