Original

A STUDY ON TAXATION AS A MAJOR SOURCE OF
GOVERNMENT FUNDING
CHAPTER 1
INTRODUCTION
I. INTRODUCTION
Taxation, imposition of compulsory levies on individuals or entities by governments.

Taxes are levied in almost every country of the world, primarily to raise revenue for
government expenditures, although they serve other purposes as well.
This article is concerned with taxation in general, its principles, its objectives, and its
effects; specifically, the article discusses the nature and purposes of taxation, whether taxes
should be classified as direct or indirect, the history of taxation, canons and criteria of
taxation, and economic effects of taxation, including shifting and incidence (identifying who
bears the ultimate burden of taxes when that burden is passed from the person or entity
deemed legally responsible for it to another). For further discussion of taxation’s role
in fiscal policy, see government economic policy. In addition, see international trade for
information on tariffs.
In modern economies taxes are the most important source of governmental revenue.
Taxes differ from other sources of revenue in that they are compulsory levies and are
unrequited—i.e., they are generally not paid in exchange for some specific thing, such as a
particular public service, the sale of public property, or the issuance of public debt. While
taxes are presumably collected for the welfare of taxpayers as a whole, the individual
taxpayer’s liability is independent of any specific benefit received.
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GOVERNMENT FUNDING
There are, however, important exceptions: payroll taxes, for example, are commonly
levied on labour income in order to finance retirement benefits, medical payments, and
other social security programs—all of which are likely to benefit the taxpayer. Because of
the likely link between taxes paid and benefits received, payroll taxes are sometimes called
“contributions” Nevertheless, the payments are commonly compulsory, and the link to
benefits is sometimes quite weak.
Another example of a tax that is linked to benefits received, if only loosely, is the use of
taxes on motor fuels to finance the construction and maintenance of roads and highways,
whose services can be enjoyed only by consuming taxed motor fuels
Taxation is an essential part of government funding, providing the resources necessary

to support public goods and services that benefit society as a whole. From infrastructure to
education to healthcare, taxation plays a critical role in maintaining a stable and prosperous
society.
But taxation is more than just a financial tool – it reflects our values and priorities as a
society. It is a way to promote fairness and equality, reduce poverty and income inequality,
and address pressing social and environmental challenges. As such, it is a topic that deserves
our attention and careful consideration.
For the smooth running of a country, without any hindrances the government in rule
needs to make various expenditures in different sectors.
The question arises in our mind “From where the government gets fund to make such
expenditure?” There are various sources from where the government gets its funding to meet
such expenditure.
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The major sources of government revenue can be-
1) Taxes
2) Rates
3) Fees
4) License fees
5) Surplus of the public sector units
6) Borrowings
7) Printing of paper money
8) Fines and penalties
9) Gifts and grants
Taxation is referred to as a major source of government funding. It is referred to as the

main tool for the proceedings of the public policy. Tax is an obligatory imposition imposed
by law or rules in opposition to the tax payer has no right to affirm itself. It is not related to a
penalty.
The nature of tax is different from other impositions by the government; it is more like
barter between tax payer and the public authority.
The main characteristics of tax are-

 It is an unavoidable payment made by the tax payer to the government. Someone who
refuses to pay tax is penalized for not complying the law. No one has the right to make
objection with respect to taxation that he is not getting advantage of definite services with
regards to the money paid as taxes
 It is the responsibility of the individuals to make payment of taxes at any situation.
 The interest of tax payer and tax payment has no direct relationship.
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II. WHAT IS TAXATION?
Taxation is the process by which a government levies taxes on its citizens and businesses
in order to generate revenue. Taxes are used to fund essential government services such as
infrastructure, education, and healthcare. Without taxation, governments would not have the
resources necessary to provide these services to their citizens.
Taxation is an important tool for government funding because it allows governments to

collect money from a large number of people and businesses. This ensures that the burden of
funding government services is spread out among many individuals and organizations, rather
than falling solely on a few wealthy individuals or corporations. Additionally, taxation helps
to promote social welfare by redistributing wealth from those who can afford to pay more to
those who need assistance.
III. DEFINITION
Tax has been defined in many ways by different authors. But in the real sense, the
different definitions suggest the same thing.
According to Winfery (1991), “Tax is regarded as a compulsory charge imposed by the

public authority (Federal, State and Local Government) for the general purpose of
government”. It is a levy regularly imposed and regarded as contribution to the general pool
from which most government expenditures are financed.
Buhari (1993) defined tax as “a compulsory contribution from individuals and/or

business organizations for the purpose of financing government expenditure”. According to
him, government of almost every country engages in a number of activities which require the
expenditure of funds. In order for the government to be able to undertake most of these
activities, it raises funds through taxation.
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Maccnaghten (1967) said “income tax is on income and it is not meant to be taxed on
anything else”. However, Dalton (1954:23) defined tax as a compulsory contribution
imposed by a public authority irrespective of service rendered in return.
Njokamma (1983) defined income tax as a measure of creating status upon any nation.
As such, 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.
Okpe(2009) stated that income tax is payable in accordance with section 3 of the PITD
1993, as amended,
On the following sources of income inside or outside Nigeria:
(a)Gain or profit from any trade, business, profession or vocation for whatever period of time
such trade, business, profession or vocation may have been carried on or exercised.
(b) Salaries, wages, allowances or other remuneration of an employment which are paid or
payable in money by the employer to the employee, subject to certain deductions that may be
approved.
(c)Gains or profits including any premiums arising from a right granted to any other person
for the use or occupation of any property (e.g. rents and royalties).
(d) Dividends, interests or discounts.
(e) Pensions, charges or annuities.

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(f)Any profits or gains not falling within the preceding categories.
IV. CLASSES OF TAXES
=> DIRECT AND INDIRECT TAXES
Public finance literature categorizes taxes based on who pays for them, who bears the
ultimate burden, and the extent to which the burden can be shifted. Taxes are typically
classified as direct or indirect, with income taxes being the most common. However, there is
disagreement among economists on the criteria for distinguishing between direct and indirect
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taxes, and it is unclear which category certain taxes, like corporate income or property taxes,
should fall into. Direct taxes are those that cannot be shifted by taxpayers, while indirect
taxes can be shifted.
DIRECT TAXES :-
Direct taxes primarily target natural persons and are based on income, consumption, or
net wealth, affecting their ability to pay. These main types of taxes are described below.
Individual income taxes are levied on personal net income exceeding a minimum, and
are adjusted based on factors like family status, child number and age, and illness-related
financial
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burdens. They are often levied at graduated rates, increasing as income increases. Personal
exemptions can create a range of income subject to zero tax rates.
Net worth taxes assess a person's total net worth, including assets and liabilities,
considering personal circumstances, similar to income tax.
Direct consumption taxes, also known as expenditure taxes or spending taxes, are levied
on income not used for savings. These taxes can be adjusted based on factors like marital
status, age, and dependents. Despite its appeal, only two countries, India and Sri Lanka, have
implemented direct consumption taxes. The "flat tax" in the late 20th century, which
exempts most income from capital, gained favor from tax experts. No country has adopted a
flat tax base, but many have income taxes with only one rate.
Taxes at death can be divided into inheritance and estate taxes. Inheritance taxes are
based on the bequest received by the inheriting person, while estate taxes are based on the
total estate left by the deceased. Inheritance taxes may consider the taxpayer's personal
circumstances, such as their relationship with the donor and net worth. Estate taxes are
generally graduated based on the estate size, with some countries offering tax-exempt
transfers to spouses and allowing for multiple heirs. Gift taxes may be included to prevent
death duties from being circumvented through property exchanges before death. These taxes
typically do not generate much revenue, but estate planning can help avoid large tax
payments.
What Are Examples of Direct Taxes?

Direct taxes are taxes paid directly to the party that levied them, such as the IRS. Common
examples include income, capital gains, or property tax that a taxpayer pays to the
government.
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INDIRECT TAXES:-
Indirect taxes are levied on goods and services production, consumption, and
transactions, including imports and exports. Examples include general sales taxes, value-
added taxes (VAT), manufacturing taxes, legal transactions, and customs duties.
General sales taxes are levies that apply to a significant portion of consumer
expenditures. They can be single-stage or multistage, with single-stage taxes collected at the
retail level or pre-retail levels in some developing countries. Multistage taxes are applied at
each stage of the production-distribution process. The VAT, which gained popularity in the
second half of the 20th century, allows taxpayers to deduct a credit for tax paid on purchases
from sales liability. The VAT has largely replaced the turnover tax, which is a tax on each
stage of the production and distribution chain without relief for previous tax payments. This
cumulative effect, known as tax cascading, distorts economic decisions.
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Sales taxes are generally applied to various products, but some countries exempt
necessities to reduce the tax burden on low-income households. Excises are levied on
specific commodities or services, with most countries imposing taxes on alcoholic
beverages, tobacco products, and motor fuel. In the past, taxes on consumer durables were
applied to luxury commodities like pianos, saddle horses, carriages, and billiard tables.
Today, automobiles are the main luxury tax object, largely due to registration requirements.
Some countries also tax gambling, and state-run lotteries have similar effects to excises, with
the government's "take" being essentially a tax on gambling. Some countries also impose
taxes on raw materials, intermediate goods, and machinery.
Excises and customs duties are specific taxes levied on specific characteristics of goods
or services, while sales taxes are ad valorem based on the value of goods. Legal transactions
include shares, house and land sales, and stock exchange transactions. Stamp duties, which
are often administratively imposed, are often viewed as nuisance taxes, often found in less-
developed countries and causing delays in transactions.
OTHER TAXES:-
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Other taxes are minor revenue generators and are small cess taxes. The various sub-
categories of other taxes are as follows:
PROPERTY TAX: This is also called Real Estate Tax or Municipal Tax. Residential
and commercial property owners are subject to property tax. It is used for the maintenance of
some of the fundamental civil services. Property tax is levied by the municipal bodies based
in each city.
PROFESSIONAL TAX: This employment tax is levied on those who practice a

profession or earn a salaried income such as lawyers, chartered accountants, doctors, etc.
This tax differs from state to state. Not all states levy professional tax.
ENTERTAINMENT TAX: This is tax that is levied on television series, movies,

exhibitions, etc. The tax is levied on the gross collections from the earnings. Entertainment
tax also referred as amusement tax.
REGISTRATION FEES, STAMP DUTY, TRANSFER TAX: These are collected in

addition to or as a supplement to property tax at the time of purchasing a property.
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EDUCATION CESS: Education Cess is levied to fund the educational programs

launched and maintained by the government of India.
ENTRY TAX: This is tax that is levied on the products or goods that enter a state,
specifically through e-commerce establishments, and is applicable in the states of Delhi,
Assam, Gujarat, Madhya Pradesh, etc.
ROAD TAX AND TOLL TAX: Road tax is used for the maintenance of roads and toll
infrastructure.
V. OBJECTIVES
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The main Objectives of Taxation in India is to finance the government’s expenditure on
public goods and services, such as education, health, infrastructure, and defence.
Taxation provides the government with the necessary resources to undertake

development programs, which in turn promote economic growth:
ECONOMIC DEVELOPMENT: Economic Development is one of the most important

objectives of taxes. The expansion of capital formation is the main determinant of the
economic progress of any country.
Capital formation is considered a fundamental pillar of economic progress. However,

lack of capital is common in less developed countries. To address capital shortages,
governments in these countries are deploying resources to accelerate capital formation. The
government uses tax revenue to increase public and private investment through various
expenditures. With proper tax planning, the ratio of savings to national income can be
increased, which will further help the economy to develop.
NON- TAX OBJECTIVES: Non-Tax Revenue is the recurring income of the

government from sources other than taxes. They are extremely important because they help
the government and improve public finances. Reducing income and wealth inequality is
another non-revenue goal of taxes. This can be achieved by taxing the rich at a higher rate
than the poor or by introducing a progressive taxation system.
PRICE STABILITY: Taxes can be used to maintain price stability, which is the short-
term goal of taxation. Taxes are considered a good way to keep inflation under control.
Increased direct tax rates can be used to curb private spending, further reducing excess
demand. Naturally, the commodity market is therefore under less pressure. As for indirect
taxes on products, they worsen inflationary trends.
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BALANCE OF PAYMENT (BOP) PROBLEMS ARE REDUCED: Rising current

account deficits are sometimes a sign of impending balance of payments problems. Capital
inflows, other net currency inflows, or a reduction in foreign exchange reserves are needed to
finance current account deficits. Tariffs and other taxes are also used to regulate imports of
certain commodities to reduce the severity of balance of payments problems and encourage
domestic production of import alternatives.
FULL EMPLOYMENT: Because the level of employment is determined by effective

demand, a government seeking to achieve full employment must lower its tax rate. As a
result, disposable income will increase, and in turn, demand for products and services will
also increase. Increased demand will drive investment, leading to increased incomes and
employment through a multiplier effect. The greater the barriers to work, the higher the tax
wedge.
REDISTRIBUTING INCOME: A taxation is a tool that can be used to redistribute

income by levying higher taxes on the rich and lower taxes on the poor. This helps to reduce
income inequality and promote social justice.
CONTROLLING INFLATION: By increasing taxes, the government can reduce the

amount of money in circulation, which can help to control inflation. Additionally, certain
taxes such as excise duty and customs duty can be used to regulate the prices of goods.
ENCOURAGING INVESTMENT: The government can provide tax incentives to

encourage investment in specific sectors or regions, which can help to promote economic
growth.
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VI. SCOPE
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 include:
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 materials as needed. 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.
RESPONSESBYTHE 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.
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VII. LIMITATION
Some circumstance beyond human control has brought some distraction research work,
some of these inevitable circumstance are:
Education System: Abnormalities surrounding the educational system in Nigeria in

which Enugu State is not an exception.
Limitation of Time: The limited number of months given for this research to done is less
than 3 three months and normally this is to be done more than this time. The research work is
combined with other academic activities in school. All these limiting factors had not allowed
a thorough research work to be carried on effectively.
Financial Problem: Another problem the researcher faced was financial constraints and
this limited the work. The high expenses incurred in gathering these materials, photocopying
of essential material, typing of document etc. visitation where applicable.
Lack of Cooperation: Finally, is lack of cooperation with the researcher encountered by

the Board not being very active in he release of adequate information. while some staffs
were not willing to give out necessary data (Figures) either by ignorance or fear of exposure
of such vital information.
VIII. DELIMITATION
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This research work is supposed to have covered the tax administration and its revenue
generation system and the comparison with other sources of government revenue in Nigeria.
Some tax administrated by the Federal Government like Company income tax, petroleum
profit tax, capital gain tax, capital transfer tax could have been involved in this research.
Due to the limit time constraint, shortage of information supply and financial constraints,
the study cannot be extended to these major parts and has therefore been limited to the
administration of tax as applicable in Enugu State Government.
IX. TAX EVASION LAWS AND IMPLICATIONS
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Different acts based on taxation have been introduced by the Indian government and
people need l to abide by these rules. In case an individual fail to pay taxes, they will be
charged a penalty.
Given below are some of the sections related to the taxation laws and penalties for non-
compliance:
SECTION 140A (1): If an assesse fails to pay tax, he or she will be considered as a
defaulter. In case of non payment of tax, the assessing officer may levy fine equal to the
arrear according to Section 221 (1).
SECTION 271 (C): If an assesse does not reveal his or her actual earning, the IT
department will impose fine of 100% to 300%.
SECTION 142 (1) AND 143 (2): Under Section 142 (1) and 143 (2), the Income Tax
department will send a tax notice to the defaulter. In case the defaulting person fails to
respond to the tax notice, the assessing officer may ask the assesse to file return.
SOME OF THE TERMS 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 English Defines 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.
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Tax Assessment: They calculations the tax due to be paid by an
individual.Inorderwords, they calculate the tax dues to be paid by individual and
governments.
Zonal Tax Authorities: these are senior tax officer charged with assessing and
collecting of tax within their zone.
Tax Law: These are laws made by the government prone to review as well giving the
guidelines and draft on how taxes will be paid. These laws are standard guiding all the tax
offices in the federation. Examples 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.
This was promulgated in 1961 since been amended.
X. THE PROS AND CONS OF TAXATION
Taxation is a necessary evil in any modern society. On one hand, it provides governments
with a reliable source of revenue that can be used to fund public services and infrastructure
projects. On the other hand, it can be seen as an infringement on individual freedom and a
burden on businesses and consumers.
One of the main advantages of taxation is that it allows governments to provide essential
public services such as healthcare, education, and transportation. Without taxation, these
services would have to be funded through other means, such as user fees or borrowing,
which can be inefficient and regressive. Additionally, taxation can be used to promote social
justice by redistributing wealth and providing a safety net for those in need.
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However, there are also several disadvantages to taxation. High tax rates can discourage
investment and entrepreneurship, leading to slower economic growth and fewer job
opportunities. Additionally, taxes can be complex and difficult to understand, making it
difficult for taxpayers to comply with the law. Finally, some argue that taxation is inherently
unfair, as it disproportionately affects certain groups, such as low-income earners and small
businesses.
In summary, taxation is a complex issue with both advantages and disadvantages. While
it is necessary for governments to raise revenue to fund public services, it is important to
strike a balance between the benefits of taxation and the costs to individuals and businesses.
XI. IMPORTANCE OF TAXATION
Taxation is an essential component of government funding, providing the revenue

necessary to support public services such as healthcare, education, and transportation.
Without taxation, governments would be unable to provide these critical services that are
necessary for the well-being of citizens.
In addition to supporting public services, taxation also plays a crucial role in developing
and maintaining infrastructure, such as roads, bridges, and airports. This infrastructure is
essential for economic growth and development, enabling businesses to transport goods and
people to access jobs and services.
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Furthermore, taxation can have a significant impact on economic growth by influencing
consumer behaviour and investment decisions. For example, tax incentives can encourage
individuals and businesses to invest in new technologies or start new businesses, leading to
job creation and economic expansion.
Overall, taxation is a vital source of government funding that supports public services,
infrastructure, and economic growth. It is essential for citizens to understand the importance
of taxation and the role it plays in ensuring a prosperous and thriving society.
XII. CHALLENGES OF TAXATION
One of the major challenges that governments face in implementing taxation policies is
tax evasion. Tax evasion occurs when individuals or businesses intentionally avoid paying
their taxes by hiding their income or assets. This can result in significant revenue losses for
the
government, which can impact public services and infrastructure. To address this challenge,
governments may need to increase enforcement efforts and penalties for those who engage in
tax evasion.
Another challenge is tax avoidance, which is the legal use of loopholes or deductions to
reduce one's tax liability. While tax avoidance is not illegal, it can still result in revenue
losses for the government. To address this challenge, governments may need to close tax
loopholes and simplify the tax code to make it more difficult for individuals and businesses
to avoid paying their fair share.
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Finally, taxation policies can also contribute to inequality, particularly if they are
regressive or disproportionately affect certain groups. For example, sales taxes tend to have a
greater impact on low-income individuals, while corporate tax breaks may benefit wealthy
individuals and large corporations. To address this challenge, governments may need to
design taxation policies that are more progressive and equitable, such as implementing a
progressive income tax or providing targeted tax credits for low-income individuals.
XIII. PRINCIPLES OF TAXATION
Adam Smith
The 18th-century economist and philosopher Adam
Smith attempted to systematize the rules that should
govern a rational system of taxation
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In The Wealth of Nations (Book V, chapter 2) he set down four general canons:
a) The subjects of every state ought to contribute towards the support of the government,
as nearly as possible, in proportion to their respective abilities; that is, in proportion to
the revenue which they respectively enjoy under the protection of the state.…
b) The tax which each individual is bound to pay ought to be certain, and not arbitrary.
The time of payment, the manner of payment, the quantity to be paid, ought all to be
clear and plain to the contributor, and to every other person.…
c) Every tax ought to be levied at the time, or in the manner, in which it is most likely to
be convenient for the contributor to pay it.…
d) Every tax ought to be so contrived as both to take out and keep out of the pockets of
the people as little as possible over and above what it brings into the public treasury of
the state.…
Although they need to be reinterpreted from time to time, these principles retain
remarkable relevance. From the first can be derived some leading views about what is fair in
the distribution of tax burdens among taxpayers.
These are: (1) the belief that taxes should be based on the individual’s ability to pay,
known as the ability-to-pay principle, and (2) the benefit principle, the idea that there should
be some equivalence between what the individual pays and the benefits he subsequently
receives from governmental activities. The fourth of Smith’s canons can be interpreted to
underlie the emphasis many economists place on a tax system that does not interfere
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with market decision making, as well as the more obvious need to avoid complexity and
corruption.
XIV. THE FUTURE OF TAXATION
As we look to the future, it's clear that technology and globalization will have a
significant impact on taxation. One major trend is the rise of e-commerce, which has made it
easier for businesses to operate across borders and avoid taxes. Governments will need to
find ways to address this challenge, such as implementing new tax laws or working together
to create international tax standards.
Another trend is the increasing use of automation and artificial intelligence in tax
collection and enforcement. This could lead to more efficient and effective tax systems, but
also raises concerns about privacy and data security. Additionally, as the world becomes
more interconnected, there may be a shift towards global taxation systems that treat all
individuals and companies equally, regardless of their location.
CHAPTER 2
REVIEW OF LITERATURE
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I. INTRODUCTION
Taxation is an essential component of any modern society, providing governments with

the necessary funds to provide public services and infrastructure. In this presentation, we will
explore the various aspects of taxation, from its history to its future, and examine how it
impacts our daily lives.
While taxation may not be the most exciting topic, it is one that affects us all. Whether
we are paying income tax, sales tax, or property tax, we are contributing to the functioning of
our society. Through this presentation, we hope to provide a better understanding of taxation
and its role in our lives.
Where does the Government get the money it spends?
The primary method for government funding for expenditure is through taxation. Before
1933, countries were on gold standards, with the quantity of currency printed depending on
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the country's gold possession. The "land" and "fresh water" standards were introduced, with
the quantity of currency printed depending on the government's land and fresh water
ownership. The value of the standard object is not essential, but the object must maintain a
specified quantity. As the volume of the object stagnates and the volume of currency is
restricted, the government can print as many currencies as they want, leading to the
imposition of inflation tax. (Kebitsamang Anne Sere, Friday, 01 December 2017) The causal
and co-integration relationship between government revenue and government expenditure
The study examines the causal relationship between government revenue and
expenditure in South Africa, using annual time series data from 1980 to 2015. The Johansen
multivariate technique and Vector Error Correction/Granger causality test were used. The
observational results suggest a long-run connection between government income and
consumption, but the causality results suggest no causality. Therefore, short-term strategy
creators should decide on government revenue and expenditure independently to reduce the
budget deficit.
(Kipilimba, Dec. 6, 2017)Impact of Tax Administration towards Government Revenue in
Tanzania- Case of Dar-es Salaam Region.
The paper examines the impact of tax administration on government revenue in

Tanzania, specifically in the Dares Salaam region. It uses questionnaires and data from 85
respondents. The research reveals that good tax planning, effective tax approach, tax
managerial structure, tax collection techniques, computerized systems, outsourcing revenue
collections to private tax collectors, intensive coordination with different entities, and proper
record maintenance
are key factors enhancing effective tax administration in Tanzania. However, the paper also
highlights challenges such as corruption, lack of awareness among local taxpayers, political
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strain, and inadequate tax laws and policies. (Cevik, December 2018) The Composition of
Government Revenue and Democracy: A Cross-Country Examination
The study examines the relationship between democracy and tax collection using cross-
country data from 2011-2016 for 135 nations. Results show that tax revenue and public
income are related to democracy dimensions. Wide, noticeable expenses like individual
personal income tax are highly correlated with democracy levels, while small, invisible taxes
like corporate income tax and consumption tax are not.
(Samwick, Monday, February 1, 2016) Effects of Income Tax Changes on the Economic
Growth
This paper examines the impact of personal income tax on the country's economic
growth and its long-term effects. It highlights the need for careful analysis to achieve
economic goals set by the tax structure. Decreased tax rates can motivate people to save and
invest, but if not accompanied by reduced expenditure, this can lead to an increase in the
federal budget deficit, affecting national savings and interest rates. To reduce the impact of
tax rates on budget deficits, it is crucial to allocate resources in sectors that add value and
increase overall efficiency and size.
(Oliver Morrissey, 12 MAY 2016) Tax Revenue Performance and Vulnerability in
Developing Countries.
The paper argues that government revenue is unprotected from external disturbances,
considering factors like earning levels, import/export mix, economic conditions, and funding
methods. Less-income countries are more vulnerable to disturbances, particularly in buying
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and selling. Democratic-ruled countries seem to be protected from revenue losses. The paper
evaluates an experimental analysis of the lower-income group, focusing on their potential
impact.
The technique used is restricted and not meeting required standards, causing errors. To
avoid mistakes, it is essential to segregate findings into lower and higher income groups, as
per past experiences and studies.
II. TAXATION AND DEMOCRACY
Taxation is a fundamental aspect of democracy because it allows the government to raise

revenue from its citizens in order to provide public goods and services. This means that
taxation plays a critical role in ensuring that the government is accountable to the people, as
it gives citizens a say in how their tax dollars are spent.
In addition to providing funding for public goods and services, taxation can also be used
as a tool to promote social justice and reduce income inequality. Through progressive
taxation, the government
can ensure that those who are more able to pay taxes contribute a larger share of their
income, while those who are less able to pay contribute less. This can help to create a more
equitable society where everyone has access to basic necessities such as healthcare,
education, and infrastructure.
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III. THE HISTORY OF TAXATION
Taxation has been a part of human society since ancient times. In fact, some of the
earliest known civilizations, such as those in Mesopotamia and Egypt, had tax systems in
place. These early tax systems were often used to fund military campaigns or public works
projects.
Over time, taxation evolved and became more complex. In medieval Europe, for
example, taxes were often levied by feudal lords on their subjects. Later, during the
Industrial Revolution, governments began to rely more heavily on income taxes to fund their
activities. Today, most modern societies have complex tax systems that include a variety of
different taxes, such as income tax, sales
tax, property tax, and corporate tax.
IV. THE ROLE OF TAXATION IN GOVERNMENT FUNDING
Taxation is one of the primary sources of revenue for governments around the world. It
provides the necessary funds to support public services such as healthcare, education, and
infrastructure. Without taxation, it would be impossible for governments to provide these
essential services to their citizens.
However, relying solely on taxation as a source of revenue has its drawbacks. High tax
rates can discourage investment and economic growth, leading to decreased employment
opportunities and lower standards of living. Additionally, some argue that taxation can be
unfair, disproportionately burdening certain individuals or groups.
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GOVERNMENT FUNDING
V. THE HISTORY OF TAXATION
Taxation has been a part of human society since ancient times. In fact, some of the
earliest known civilizations, such as those in Mesopotamia and Egypt, had tax systems in
place. These early tax systems were often used to fund military campaigns or public works
projects.
Over time, taxation evolved and became more complex. In medieval Europe, for
example, taxes were often levied by feudal lords on their subjects. Later, during the
Industrial Revolution, governments began to rely more heavily on income taxes to fund their
activities. Today, most modern societies have complex tax systems that include a variety of
different taxes, such as income tax, sales tax, property tax, and corporate tax.
VI. THE FUTURE OF TAXATION
As we look to the future, it's clear that technological advancements and changing
economic conditions will have a significant impact on the tax system. One major trend that
we're already seeing is the rise of digital currencies such as Bitcoin. As these currencies
become more mainstream, governments will need to find new ways to regulate them and
ensure that they are being taxed appropriately.
Another area where technology is likely to have an impact is in the realm of automation.
As more jobs are replaced by machines, there will be fewer people paying income taxes.
This could lead to a shift towards other types of taxes, such as consumption taxes or taxes on
robots and AI systems.
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GOVERNMENT FUNDING
CHAPTER 3
RESEARCH DESIGN
I. INTRODUCTION
Welcome, everyone, to our presentation on taxation - a topic that is often met with
groans and eye-rolls. But fear not! We promise to make this informative and even a little bit
fun.
You might be wondering why we're talking about taxation in the first place. Well, did
you know that taxes are one of the main ways that governments fund public services like
healthcare, education, and infrastructure? That's right - every time you pay your taxes, you're
contributing to the greater good of society. And who doesn't want to be a part of that?
II. STATEMENT OF THE PROBLEM

Tax constitutes the greater percentage of the internally generated revenue in Enugu state
and as well the major source of revenue for the government in financing its activities. Tax
however has its fundamental problems in the area of administration.
There is some problem in planning, control and adequate information flow of tax
collection generally. Since the government financial policy and objectives are to ensure
adequate revenue and conducive environment for the populace through progressive taxation
and other fiscal measures designed to aid the rapid growth and development of the society
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GOVERNMENT FUNDING
for the benefit of the citizenry. It is therefore necessary that these avenues of revenue
collection 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
tax laws. Many individuals as well as organizations see taxation policy as being harsh and
unfavourable.
They argue that while few enterprises especially large companies continue to benefit
from the government support through grants, subsidies and other tax incentive, others find
the policies unbearable and as 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 than envisaged is
collected through tax by the government and thereby less social amenities than proposed are
made available. These problems will be solved as soon as an efficient machinery is set in
motion for effective administration and review of state tax laws.
III. HOW TAXES ARE COLLECTED
Taxes are collected in a variety of ways, depending on the type of tax and the
jurisdiction. One common method is through payroll deductions, where employers withhold
a portion of an employee's wages to cover income taxes. Another method is through
quarterly payments, where self-employed individuals or those with significant investment
income make estimated payments throughout the year.
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GOVERNMENT FUNDING
In addition to these methods, some jurisdictions also rely on sales taxes, property taxes,
or other forms of taxation. For example, sales taxes may be collected at the point of sale,
while property taxes may be assessed annually based on the value of a person's home or
other real estate holdings.
IV. THE ROLE OF TAXATION IN GOVERNMENT FUNDING
Taxation plays a crucial role in government funding, providing the revenue necessary to
support public services and infrastructure. In fact, taxation is the primary source of
government revenue in many countries around the world.
According to data from the Organization for Economic Cooperation and Development
(OECD), tax revenue accounted for an average of 34% of GDP in OECD countries in 2018.
This revenue was used to fund a wide range of government programs, including education,
healthcare, transportation, and social welfare.
V. THE BENEFITS OF TAXATION
Taxation is often viewed in a negative light, but it's important to recognize the many
benefits it brings. One of the biggest benefits of taxation is that it funds public services like
education and healthcare. Without taxes, these essential services would not be available to
everyone, regardless of their income level.
In addition to funding public services, taxation also helps to reduce income inequality.
By redistributing wealth from the rich to the poor, taxes help to ensure that everyone has
access to basic needs like food and shelter. This can have a positive impact on society as a
whole, leading to greater social cohesion and stability.
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GOVERNMENT FUNDING
VI. THE DRAWBACKS OF TAXATION
While taxation is a necessary component of government funding, it also has its

drawbacks.
One major drawback is the burden it places on taxpayers. For example, high-income earners
may be subject to higher tax rates, which can significantly reduce their disposable income.
This can lead to decreased consumer spending and a slower economy.
Another drawback of taxation is that it can be difficult to administer and enforce. Tax
laws are complex and constantly changing, which can make it difficult for taxpayers to
understand their obligations. Additionally, tax evasion and fraud are common problems,
which can undermine the integrity of the tax system.
VII. TAXATION AND ECONOMIC GROWTH
Taxation is a crucial factor in economic growth. Although taxation can be seen as a

burden on individuals and businesses, it also provides the government with the resources
needed to invest in infrastructure, education, and other public services that can stimulate
economic growth.
Research has shown that a well-designed tax system can actually promote economic
growth by providing incentives for investment, innovation, and entrepreneurship. For
example, tax credits for research and development can encourage companies to invest in new
technologies, while lower tax rates for small businesses can spur job creation and economic
activity.
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GOVERNMENT FUNDING
VIII. TAXATION AND SOCIAL WELFARE
Taxation plays a crucial role in funding social welfare programs that support low-income
individuals. These programs may include healthcare, education, and housing assistance,
among others. By redistributing wealth through taxation, governments can help to reduce
inequality and provide a safety net for those in need.
However, the impact of taxation on social welfare is not always straightforward. High tax
rates may discourage economic growth and reduce job creation, which can ultimately harm
low-income individuals. Additionally, some argue that taxation should not be used as a
substitute for addressing underlying structural issues that contribute to poverty and
inequality.
IX. TAXATION AND GOVERNMENT SPENDING
Taxation is one of the primary sources of revenue for governments around the world. The
amount of tax collected directly impacts how much money a government has to spend on
public services, such as education, healthcare, and infrastructure.
For example, if a government collects a large amount of tax revenue, it can allocate more
resources towards public services. On the other hand, if tax revenue is low, a government
may have to cut back on spending or find alternative sources of funding.
X. TAXATION IN DIFFERENT COUNTRIES
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GOVERNMENT FUNDING
Taxation systems vary greatly between countries, with some relying heavily on income
tax while others primarily use consumption taxes like VAT. For example, in the United
States, income tax is the largest source of government revenue, while in Saudi Arabia, oil
exports make up the majority of government income.
Another key difference is the level of progressivity in taxation. Some countries have
highly progressive tax systems, where high earners are taxed at much higher rates than low
earners,
while other coun0tries have flatter tax systems. For instance, the Scandinavian countries
have some of the most progressive tax systems in the world, while many developing
countries have flatter tax systems that place a greater burden on low-income individuals.
XI. TAXATION AND POLITICS
Taxation and politics are inextricably linked. Tax policies can be used as a tool to win or
lose elections, depending on how they are framed and communicated to the public. For
example, a candidate who advocates for tax cuts may appeal to voters who believe in smaller
government and individual freedom, while a candidate who supports higher taxes may
appeal to those who prioritize social welfare programs and public services.
At the same time, tax policies can also reflect the political ideology of a particular party
or administration. For instance, a conservative government may prioritize tax cuts for
businesses and the wealthy, while a progressive government may focus on increasing taxes
on the rich to fund social programs. The way that politicians approach taxation can reveal a
lot about their values and priorities.
XII. THE FUTURE OF TAXATION

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GOVERNMENT FUNDING
As we look to the future of taxation, there are many potential changes on the horizon.
One major factor is the rise of automation and artificial intelligence, which could streamline
tax collection and reduce errors. However, this could also lead to job losses in the tax
industry.
Another potential change is the implementation of new tax policies, such as a wealth tax
or a carbon tax. These policies could help address issues like income inequality and climate
change, but they could also face opposition from those who would be impacted by them.
XIII. THE ETHICS OF TAXATION
When it comes to taxation, one of the most hotly debated topics is whether or not it is fair
to tax the wealthy more than the poor. On one hand, some argue that those who have more
should contribute more to society. After all, they have benefited more from the opportunities
and resources provided by the government. On the other hand, others argue that this
approach is unfair because it punishes success and discourages hard work. They believe that
everyone should be taxed at the same rate, regardless of their income.
Ultimately, the answer to this question depends on your personal beliefs about the role of
government in society. If you believe that the government has a responsibility to provide for
its citizens and ensure that everyone has access to basic needs like healthcare and education,
then you may support a progressive tax system that taxes the wealthy more. If you believe
that individuals should be responsible for their own success and that the government's role
should be minimal, then you may support a flat tax system where everyone is taxed equally.
XIV. THE ROLE OF TAX PROFESSIONALS
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GOVERNMENT FUNDING
Tax professionals, such as accountants and tax attorneys, play a crucial role in ensuring
that individuals and businesses comply with tax laws and regulations. They provide valuable
guidance and expertise on issues such as tax planning, preparation, and filing.
For example, a tax professional can help a business owner navigate the complex world of
tax deductions and credits, potentially saving them thousands of dollars in taxes each year.
Similarly, an individual taxpayer may benefit from the advice of a tax professional when it
comes to claiming deductions for charitable donations or medical expenses.
XV. TAXATION AND ENTREPRENEURSHIP
Taxation can have a significant impact on entrepreneurship, particularly for small

businesses. One way that taxation can encourage entrepreneurship is through tax breaks for
small businesses. For example, in the United States, small businesses can qualify for a
variety of tax deductions and credits, such as the Section 179 deduction for equipment
purchases or the Research and Development Tax Credit for innovative projects.
On the other hand, high taxes can also discourage entrepreneurship by making it more
difficult for new businesses to get off the ground. This is especially true for entrepreneurs
who are just starting out and may not have the financial resources to weather high tax
burdens. As such, policymakers must strike a delicate balance between providing incentives
for entrepreneurs while still ensuring adequate government funding through taxation.
XVI. TAXATION AND INNOVATION
Taxation can have a significant impact on innovation, both positively and negatively.
One way that taxation can encourage innovation is through research and development tax
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GOVERNMENT FUNDING
credits. These credits provide incentives for companies to invest in new technologies and
products, which can lead to increased innovation and economic growth.
On the other hand, high tax rates can discourage innovation by reducing the resources
available for research and development. Additionally, complex tax codes and regulations can
create barriers for small businesses and startups, which are often the drivers of innovation in
many industries.
CHAPTER 4
COMPANY PROFILE
I. INTRODUCTION
LG Electronics' corporate governance and organization is provided so that current and

potential investors can better comprehend how the company is managed.
LG Electronics is a global innovator in technology and consumer electronics with a

presence in almost every country and an international workforce of more than 74,000. LG’s
four companies – Home Appliance & Air Solution, Home Entertainment, Vehicle
component Solutions and Business Solutions – combined for global revenue of over KRW
80 trillion in 2022. LG is a leading manufacturer of consumer and commercial products
ranging from TVs, home appliances, air solutions, monitors, service robots, automotive
components and its premium LG SIGNATURE and intelligent LG ThinQ brands are familiar
names world over. Visit www.LGnewsroom.com for the latest news.
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GOVERNMENT FUNDING
II. BOARD OF DIRECTORS
Following the launch of the holding company, LG Corp., LG Electronics operates under
an advanced corporate governance structure that comprises a professional administrator and
a Board of Directors. This structure helps us deploy more transparent, value-creating
management activities that help increase corporate and shareholder value.
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GOVERNMENT FUNDING
III. MANAGEMENT SYSTEM
When LG Electronics removed the Circulating Investment Structure of its affiliated

companies (through the launch of a holding company system), this enabled the holding
company to take full charge of investments. Consequently, LG Electronics has been able to
focus on its own businesses while increasing the overall value of the Company.
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GOVERNMENT FUNDING
This corporate governance structure has laid the groundwork for increasing managerial
transparency. Through a responsible management system comprising of the CEO of LG
Electronics and a Board of Directors, we are taking huge steps in strengthening our
competitiveness at both the domestic and international level, in order to maximize corporate
and shareholder value.
IV. EVALUATION AND COMPENSATION
Compensation for the BOD members is made within regulations pertaining to BOD
compensation that has been approved at the General Shareholder's Meeting.
The evaluation of management and executives of LGE is held annually. Top

management and executives are evaluated to determine whether they have set and achieved
challenging goals, whether their job objectives composed of quantitative and non-
quantitative factors were achieved, as well as their capability through fair and objective
process, and appropriate compensation corresponding to the outcome of the evaluation is
determined.
V. DIRECTOR
Bong Seok Kwon

Vice-Chairman, LG Corp.
Chairman of B.O.D
Non-executive Director
Management Committee
Independent Director Candidate
Recommendation Committee
Last appointed in January 2022
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GOVERNMENT FUNDING
William Cho
CEO, LG Electronics
Executive Director
ESG Committee
Last appointed in January 2022
Doo Yong Bae

CFO, LG Electronics
Executive Director
Internal Transaction Committee
Last appointed in March 2021
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GOVERNMENT FUNDING
Sang Goo Lee

Professor, Seoul National University
Independent Director
Audit Committee
ESG Committee
Soo Jin Kang

Professor, Korea University School of Law
Audit Committee
ESG Committee
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GOVERNMENT FUNDING
Choong Yuel Yoo

Professor, KAIST
Audit Committee
ESG Committee
Seung Woo Seo

Professor, Seoul National University
ESG Committee
Audit Committee
VI. HISTORY
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GOVERNMENT FUNDING
The history of LG Electronics has always been surrounded by the company's desire to
create a happier, better life.
Pioneering in technology through LG's innovative start and continuous growth, LG is

becoming a faster and smarter global brand of the future.
LG Electronics was established in 1958 and has since led the way into the advanced
digital era thanks to the technological expertise acquired by manufacturing many home
appliances such as radios and TVs.
LG Electronics has unveiled many new products, applied new technologies in the form
of mobile devices and digital TVs in the 21st century and continues to reinforce its status as
a global company.
2005 - Takes the lead in US drum washing market

2008 - Develops world's first LTE mobile modem chip
2009 - Becomes the second-largest LCD TV brand worldwide
2011 - Launches shutter-glasses 3D TVs
2012 - First in the world to market 84-inch ULTRA HD TV
2013 - Introduces HomeChat™ service for smart appliances, Launches Vehicle Component
Company
2014 - Introduces world’s first 4K OLED TV and webOS smart TV, Introduces the G3
smartphone with Quad HD display
2016 - Introduces premium LG SIGNATURE brand
VII. JEONG-DO MANAGEMENT

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GOVERNMENT FUNDING
LG Electronics 'Jeong-do Management' embodies our high ethical standards and doing
business in a transparent and honest manner.
Pioneering in technology through LG's innovative start and continuous growth, LG is

becoming a faster and smarter global brand of the future.
VIII. LG Way
"Jeong-do Management" is LG's unique application of ethics. LG will succeed through

fair management practices and constantly develop our business skills.
VISION - LG's vision is to become the market leading company with broad market
recognition.
CONDUCT - LG will succeed through the constant development of capability based in
ethical management.
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MANAGEMENT PHILOSOPHY - Basic management philosophies that ensure LG will
accomplish its business activity goals.
IX. CODE OF ETHICS
It is the intention of LG, as set forth in the management charter, to spread the
management philosophies of "creating value for customers" and "respect based
management" allowing for more responsible and open management. LG continues to
develop as the global leading company through seeking greater public benefits founded in
cooperation, mutual trust, and respect for the free market economy. For this reason all LG
employees promise to act uprightly and make value judgments in accordance with the code
of ethics.
X. COMPLIANCE OF CONDUCT
LG Electronics is committed to "winning by the rules". We regard sound and transparent

management practices as the foundation to achieving individual success and global
competitiveness. Throughout our global operations, LG Electronics pledges to comply with
local laws and regulations, compete fairly, and uphold the highest standards of business
conduct. The LG Electronics Compliance Code of Conduct sets forth clear standards for
legal and regulatory compliance all employees should live by in order to realize the
principles provided in the LG Code of Ethics.
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GOVERNMENT FUNDING
XI. FINANCIAL INFORMATION
FINANCIAL HIGHLIGHTS
Consolidated
Financial
2020 2021 2022
Highlights
KRW (bn) KRW (bn) KRW (bn)
Sales 57,176 73,908 83,467
Operating Profit(Loss) 3,843 4,058 3,551
Net Profit(Loss) 2,064 1,415 1,863
Total Assets 48,204 53,482 55,156
Total Liabilities 30,662 33,384 32,664
Total Shareholder`s Equity 17,542 20,098 22,492
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GOVERNMENT FUNDING
INCOME STATEMENT
Consolidated
Income
2020 2021 2022
Statement
KRW (bn) KRW (bn) KRW (bn)
Sales 57,176 73,908 83,467
Cost of Goods Sold 41,830 55,011 63,231
Gross Profit 15,346 18,897 20,236
Operating Income (Loss) 3,843 4,058 3,551
Profit (Loss) before Income Tax 3,315 3,839 2,540
Net Profit (Loss) 2,064 1,415 1,863
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GOVERNMENT FUNDING
STATEMENT OF FINANCIAL POSITION
Consolidated
Statement of 2020 2021 2022

Financial Position
KRW KRW KRW
(bn) (bn) (bn)
Assets 48,204 53,481 55,156

Current Assets 23,239 27,488 27,488
Non-current Assets 24,965 25,994 27,668
Liabilities
30,662 33,384 32,664
Current Liabilities
20,207 23,620 22,333
Non-current
10,455 9,764 10,332
Liabilites
Equity 17,542 20,098 22,492
XII. EXECUTIVES
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GOVERNMENT FUNDING
Meet the people that help make LG a global leader and technology innovator in consumer
electronics, home appliances.
William Cho
Chief Executive Officer
Jae-cheol Lyu
President of Home Appliance & Air Solution Company
Hyoung-sei Park
President of Home Entertainment Company
Seok-hyun Eun
President of Vehicle component
Solutions Company
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GOVERNMENT FUNDING
Ik-hwan Jang
President of Business Solutions Company
Doo-yong Bae
Chief Financial Officer
Chief Risk Management Officer
Byoung-hoon Kim
Chief Technology Officer
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GOVERNMENT FUNDING
Sam-soo Lee
Chief Digital Officer
Chief Strategy Officer
Weon-bum Kim
Chief Human Office
XIII. BRAND IDENTITY

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GOVERNMENT FUNDING
LG is the brand that is Delightfully Smart. "Life's Good" slogan, and futuristic logo are a
great representation of what we stand for Global, Tomorrow, Energy, Humanity and
Technology are the pillars that this corporation is founded on; with the capital letters L and
G positioned inside a circle to center our ideals above all else, humanity. The symbol mark
stands for our resolve to establish a lasting relationship with, and to achieve the highest
satisfaction for our customers.
The letters "L" and "G" in a circle symbolize the world, future, youth, humanity, and
technology. Our philosophy is based on Humanity. Also, it represents LG's efforts to keep
close relationships with our customers around the world.
The symbol mark consists of two elements: the LG logo in LG Grey and the stylized
image of a human face in the unique LG Red color. Red, the main color, represents our
friendliness, and also gives a strong impression of LG's commitment to deliver the best.
Therefore, the shape or the color of this symbol mark must never be changed.
CHAPTER 5
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GOVERNMENT FUNDING
DATA ANALYASIS AND INTERPRETATION
I. WHAT IS DATA ANALYSIS?
Data analysis is the process of examining and interpreting data using statistical and
mathematical techniques. In the context of taxation, data analysis is used to identify patterns
and trends in tax data that can inform policy decisions and improve tax collection efforts.
Through data analysis, governments can gain insights into taxpayer behaviour, identify
areas of noncompliance, and develop more effective tax policies. Visual aids such as graphs
and charts can help communicate complex tax data to policymakers and the public, making it
easier to understand and act upon.
II. WHY IS DATA ANALYSIS IMPORTANT FOR TAXATION?
Data analysis is crucial for taxation as it allows governments to make informed decisions
about tax policies. By analysing data on income, expenditure, and demographics,
governments can identify patterns and trends that can inform tax policy decisions. For
example, data analysis can help governments identify which income groups are most
affected by taxation and adjust tax policies accordingly.
In addition, data analysis can help governments detect and prevent tax evasion. By
analysing data on tax returns and financial transactions, governments can identify suspicious
activity and investigate further. For example, data analysis played a key role in the
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GOVERNMENT FUNDING
investigation of the Panama Papers scandal, which exposed widespread tax evasion by
wealthy individuals and corporations.
III. TYPES OF DATA USED IN TAXATION
In taxation, there are several types of data that are used to understand the financial
situation of individuals and businesses. One type of data is income data, which includes
information about how much money people make from various sources. This data can be
used to determine tax rates and identify potential tax evasion.
Another type of data is expenditure data, which includes information about how people
and businesses spend their money. This data can be used to identify areas where tax
incentives or deductions may be needed to encourage certain types of spending.
IV. FUTURE OF DATA ANALYSIS IN TAXATION
Artificial intelligence (AI) and machine learning are poised to revolutionize the field of
taxation. These technologies can be used to analyze vast amounts of data quickly and
accurately, allowing governments to make better decisions and improve tax policies.
For example, AI algorithms can help identify patterns in tax data that might not be
immediately apparent to human analysts. This can lead to more targeted enforcement efforts
and a reduction in tax evasion. Machine learning can also be used to predict future tax
revenues based on historical data, allowing governments to plan their budgets more
effectively.
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GOVERNMENT FUNDING
DATA ANALYSIS AND

INTERPRETATION
1. Are You Regular Tax
Payer?
Table no-1
Sr. No
Response
Respondent No
Percentage (%)
1
Yes
40
58
GOVERNMENT FUNDING
80%
2
No
10
20%
Total
50
100%
DATA ANALYSIS AND
INTERPRETATION
Payer?
Table no-1
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GOVERNMENT FUNDING
Sr. No
Response
Respondent No
Percentage (%)
1
Yes
40
80%
2
No
10
20%
Total
60
GOVERNMENT FUNDING
50
100%
DATA ANALYSIS AND
INTERPRETATION
Payer?
Table no-1
Sr. No
Response
Respondent No
Percentage (%)
1
Yes 61
GOVERNMENT FUNDING
40
80%
2
No
10
20%
Total
50
100%
DATA ANALYSIS AND INTERPRETATION
1. ARE YOU REGULAR TAX PAYER?
TABLE NO – 01
SL.NO. Response Respondent No. Percentage (%)
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GOVERNMENT FUNDING
1 YES 40 80%
2 NO 10 20%
TOTAL 50 100%

Payer?
Table no-1
Payer?
Table no-1
ANALYSIS
From above chart, it is analysis that in total of 100% that 80% respondent are
regular tax payer and 20% respondent are not regular tax payer
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GOVERNMENT FUNDING
CHART NO-1
regular tax payer
20%
YES NO
80%
Analysis
From above chart, it is analysing
that 80% respondent are regular tax
payer and 20% respondent are not
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GOVERNMENT FUNDING
regular tax payer.

Interpretation
Maximum respondent is regular tax
payer
Analysis
regular tax payer.
Interpretation
payer
Analysis
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GOVERNMENT FUNDING

regular tax payer.
Interpretation
payer
Analysis
regular tax payer.
Interpretation
payer
66
GOVERNMENT FUNDING
INTERPRETATION
Maximum respondent is for regular tax payer.
Analysis
regular tax payer.
Interpretation
payer
Analysis
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GOVERNMENT FUNDING
regular tax payer.

Interpretation
payer
2. UNDER WHICH HEADS OF INCOME, YOUR INCOMES

BECOMES TAXABLE?
TABLE NO - 2
SL.NO. RESPONSE RESPONDENT PERCENTAGE(%)

NO.
1 Income from salary 22 44.7%
2 Income from house 3 6.3%

property
3 Profit & gain of business / 14 27.7%
profession
4 Income from other sources 11 21.3%
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GOVERNMENT FUNDING
5 Capital gain 0 0%
TOTAL 50 100%
ANALYSIS
From above chart, it is analysing that 44.7% income from salary and 6.3%
income from house property and 27.7% profit &gain of business / profession
21.3% income from other sources and 0% of capital gain respondent are heads of
income become taxable.
CHART NO – 2
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GOVERNMENT FUNDING
Heads Of Income
50.00%
45.00%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
ar
y rty io
n es in
l pe s urc ga
sa o es so ta
l
m pr of r pi
fro e pr he a
e us / ot C
m ho es
s
m
co m si n fro
In fro u e
e b m
m of co
co i n In
In ga
t&
rofi
P
INTERPRETATION
Maximum respondent has income from salary.
3. WHAT IS YOUR INCOME RANGE ?
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GOVERNMENT FUNDING
TABLE NO – 3
SL.NO RESPONSE RESPONDENT PERCENTAGE

NO
1 Less than Rs. 20 40.4%

3lakhs
2 Rs. 3lakhs to Rs. 27 53.2%

5lakhs
3 More than 5 3 6.4%

lakhs
Total 50 100%
ANALYSIS
From above chart, it is analysing that 44.7% income from salary and 6.3% income
from house property and 27.7% profit &gain of business / profession 21.3% income
from other sources and 0% of capital gain respondent are heads of income become
taxable.
CHART NO 3
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GOVERNMENT FUNDING
1
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
Less than Rs. 3lakhs Rs. 3lakhs to Rs. 5lakhs More than 5 lakhs
INTERPRETATION
Maximum respondent has income from salary.
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GOVERNMENT FUNDING
4. DOES YPUR TAX CONSULTANT NOTIFY THE VARIOUS
PROVISION SUBMISSION ?
TABLE NO – 04

NO
(%)
1 YES 47 93.6%
2 NO 3 6.4%
50 100%
ANALYSIS
From above chart, it is analyse that 93.6% Respondent tax consultant is notify the
various provision and submission of all tax and 6.4% tax consultant is not notify the
various provision and submission of all tax.
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GOVERNMENT FUNDING
CHART NO – 4
Tax consultant notify the various provision submission
6.45%
93.60%
YES NO
INTERPRETATION
Maximum respondent has tax consultant is notify the various provision and
submission of all tax.
74
GOVERNMENT FUNDING
5. WHETHER YOUR TAX CONSULTANT TIMELY REMINDS YOU
REGARDING TAX OBLIGATION?
TABLE NO – 5
SL.NO RESPONSE RESPONDENT PERCENTAGE(%)

NO.
1 YES 45 89.4%
2 NO 5 10.6%
TOTAL 50 100%
ANALYSIS
From above chart, it is analyse that 89.4% respondent tax consultant is

reminds the tax obligation and 10.6% respondents tax consultant is not
reminding the tax obligation.
75
GOVERNMENT FUNDING
CHART NO – 5
Tax consultant timely reminds you regarding tax obligation
10.60%
89.40%
YES NO
INTERPRETATION
Maximum respondent tax consultant is reminding the tax obligation.
76
GOVERNMENT FUNDING
6. HOW DO YOU GET THE INFORMATION ABOUT TAXATION?
TABLE NO – 6

NO. (%)
1 Through tax 17 34%
consultant
2 Through friends and 18 36.2%
relatives
3 Through media 15 29.8%
50 100%
ANALYSIS
From above chart, it is analysing that 36.2% respondent for through friends
& relatives & 34% are through tax consultant and 29.8 through media get
the information for tax payer.
77
GOVERNMENT FUNDING
CHART NO – 6
Information About Taxation
29.80%
34.00%
36.20%
Through tax consultant Through friends and relatives Through media
INTERPRETATION
Maximum respondent has got the information from friends and relatives
that is 36.2 and minimum is through media that is 29.8%
78
GOVERNMENT FUNDING
7. HAS ANY PENALTY BEING LEVIED BY INCOME TAX

AUTHORITY FOR FILLING UP TAX RETURN LATE?
TABLE NO – 7
SL.NO RESPONSE RESPONDENT PERCENTAGES

NO. (%)
1 YES 33 66%
2 NO 17 34%
TOTAL 50 100%
ANALYSIS
From the above chart, it is analysing that 66% respondent is penalty being
levied by income tax authority for filling up tax return late and 34% is not
penalty being levied by income tax authority for filling up tax return late.
79
GOVERNMENT FUNDING
CHART NO. 7
Penalty Being Levied by Income Tax Authority for Filling Up

Tax Return Late
34%
66%
YES NO
INTERPRETATION
Maximum respondent opinion that is Penalty Being Levied by Income Tax

Authority for Filling Up Tax Return Late
80
GOVERNMENT FUNDING
8. ARE YOU SURE THAT YOUR TAX CONSULTANT KEEPS ALL

THE INFORMATION REGARDING YOUR INCOME TAX
MATTER CONFIDENTIAL?
TABLE NO - 8
SL.NO. RESPONSE RESPONDEN PERCENTAGE

T NO. (%)
1 YES 46 91.3%
2 NO 4 8.7%
TOTAL 50 100%
ANALYSIS
From the above chart, it is analysed 91.3% respondent is tax consultant

keeps all the information regarding income tax matter confidential and
8.7% is respondents' opinion that is not confidential income tax matter.
81
GOVERNMENT FUNDING
CHART NO – 8
Income Tax Matter Confidential
8.70%
91.30%
YES NO
INTERPRETATION
Maximum respondent opinion that tax consultant keeps all the information
regarding income tax matter confidential.
82
GOVERNMENT FUNDING
9. WHAT IS YOUR PREFFEREED INVESTMENT TO REDUCE TAC

LIABILITY?
TABLE NO – 9
SR.NO RESPONSE RESPONDENT PERCENTAGE

NO
1. LIC 20 40.4%
2. Mutual fund 16 29.8%
3. Fixed deposit 10 21.3%
4. PPF 2 4.2%
5. Other 2 4.3%
Total 50 100%
ANALYSIS
From the above chart, it is analysing that 40.4% respondent is invest the money
for reduce the tax LIC,29.8% mutual fund 21.3% fixed deposit,4.2 PPF and 4.3%
other.
83
GOVERNMENT FUNDING
CHART NO – 9
Investment to reduce tax liability
4.20%
4.30%
21.30%
40.40%
29.80%
LIC Mutual fund Fixed deposit PPF Other
INTERPRETATION
Maximum respondent is investing the money for reducing the tax.
84
GOVERNMENT FUNDING
10. DOES YOUR TAX CONSULTANT HELPS YOU IN

UNDERSTANDING UNION BUDGET?
TABLE NO – 10
SR.NO RESPONSE RESPONDENT PERNCENTAGE

NO
1. YES 45 89.4
2. NO 5 10.6%
TOTAL 50 100%
ANALYSIS
From the above chart, it is analyse that 89.4% respondent is tax consultant helps
to understanding union budget and 10.6% are not helps to understand union
budget.
85
GOVERNMENT FUNDING
CHART NO - 10
Tax consultant helps understanding union budget
10.60%
89.40%
Yes No
INTERPRETATION
Maximum respondent gets the tax consultant helps to understanding union

budget.
86
GOVERNMENT FUNDING
CHAPTER 6
FINDING AND SUGGESTIONS
FINDINGS OF STUDY
1. It is found that 80 % maximum respondent regular tax payers and 20% do not pay
tax regularly.
2. It is found that 44.7 % maximum respondent are pay tax from head of income
from salary.
3. It is found that 53.2% maximum respondent income range is Rs 3 lakhs to Rs 5

lakhs.
4. It is found that 93.6% maximum respondents receive notification about provision

and submission of tax-by-tax consultant.
5. It is found that 89.4% maximum respondent get reminder from tax consultant
regarding obligations.
6. It is found that 36.2% maximum respondent get the information about taxation is
through friends & family.
87
GOVERNMENT FUNDING
7. It is found that 66% maximum respondent faced misplacement of any document
regarding income tax
8. It is found that 91.3% maximum respondent income tax matter is confidential
9. It is found that 40.4% respondent invest in LIC for reduce tax liability
10. It is found that 89.4% respondent tax consultant helps to

understanding union budget.
88
GOVERNMENT FUNDING
SUGGESTIONS
1. Every citizen of India who is liable to pay tax must regularly pay income tax so
that government can take initiatives for infrastructure and various schemes for
girls and senior citizens.
2. Majority of people should have tax awareness and they should be also aware
about tax saving schemes and instruments people should invest and save their
money for future benefits. They can invest in following such are as follow:
 Investing in ULIPs
Unit Link Insurance Plans (ULIPs) are special insurance plans which also act as a
tax-saving instrument. These plans are a hybrid of life insurance and investment.
When one hand over money to go into a ULIPS, a significant portion goes towards
a life insurance plan, and the rest becomes a part of an equity-based fund.
Therefore, an individual can get the best of both worlds as well as enjoy tax
exemptions and returns, making it one of the best tax saving tips. The plans differ
for an individual and a group. A few includes:
 Future Smart Plan
89
GOVERNMENT FUNDING
This ULIP is eligible for individuals. The plan involves creating a fund for one's
future offspring. A child of an insured will receive a sum of money after the death
of the individual as well as premium funding in case of a disability.
 Term Edge Plan
This plan involves ensuring the employees of a company against certain risks. This
plan offers frequent periods to pay the premium as well as receive rebates.
 Investing in mutual funds
Investing in mutual funds is probably one of the more generic ways for reducing
one's taxable income. This is especially true when one invests in Equity Linked
Savings Scheme (ELSS). This scheme receives tax deductions on the basis of
Section 80C.
It has a lock-in period of only three years, which is lower in comparison to other
tax saving options like Private Provident Funds and Bank Fixed deposits. These
options usually require a lock-in period of eight years.
In addition to this, there is no imposition of tax on these funds. Research has shown
that one can save up to Rs 46,000 by participating in this scheme. It also has the
potential to provide the highest returns in comparison to other funds.
 Public Provident Funds (PPFs)
90
GOVERNMENT FUNDING
Public Provident Fund (PPF) scheme is a long-term investment option that offers
an attractive rate of interest and returns on the amount invested. The interest earned
and the returns are not taxable under Income Tax. The current interest rate for
(January-March) FY 2022-23 for PPF accounts has been fixed at 7.1%,
compounded annually.
As compared to the corresponding fixed deposit (FD) rates in many banks, Public
Provident Fund gives higher interest benefits to its subscribers.
91
GOVERNMENT FUNDING
CHAPTER 7
CONCLUSION
For a country like ours which is growing and developing rapidly, Tax plays the most crucial
role in it. India is a country where people belong to different communities and statuses and
that’s the reason why the taxation system is long and complicated. India is suffering a lot
from tax evasion. Only 1 per cent of the Indian population pays income tax and declares
earnings above the non-taxable income. Only 5.78 crore income tax returns were filed by
individual taxpayers for the financial year 2018-19 till February 2020. These tax defaulters
make the whole taxation system hollow. There are some measures to fight tax evasions such
as Minimising the corruption activities, Building trust among small groups, Changing in the
punishment/legal provisions and Compulsory maintenance and audit of accounts.
Proper regulation of the taxation system in India and effective collection of tax will provide
the government with an adequate amount of funds to improve the quality of life within the
borders.
Paying tax may not be the best thing that one does, but it does pay for all the facilities,
development and infrastructure that one enjoys.
The study was conducted to analyse the major source of government funding. Based on the
study conducted, it can be concluded that tax is a major source of government funding
because the bar graph and trend line show a positive inclination of government revenue from
tax income rather than non-tax income. Non-Tax Revenue is basically the recurring income
earned by the Government from sources other than taxes like Rent, Fines, Investments, Fee
92
GOVERNMENT FUNDING
and penalties. Gift also comes under the non-tax revenue system. Further it can be suggested
that, GST Rates should be rationalized and reduced to make India more competitive and in
interest of compliance and economic growth. The highest rate should be kept at 18% and
there should be only few items that fall in 28% slab. Daily use items such as soaps, electrical
equipment, and movie tickets should not be taxed at 28%. Through the data, the future trend
is being used to predict the upcoming years of tax revenue and non-tax revenue. Both the tax
and non-tax revenue shows increasing trend in future which will enhance more government
income and will lead to economic improvement, development and growth
BIBLIOGRAPHY
1. Cevik, S. (December 2018). The Composition of Government Revenue and

Democracy: A Cross-Country Examination. IJOPEC, 5-115. Retrieved
fromhttps://www.researchgate.net/publication/330384667_The_Composition_of_Gov
ernment_Revenue_and_Democracy_A_Cross-Country_Examination
2. Davies, A. (2010,July). Where does the government get the money it spends?
Mercatus Center at George Mason University
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3.

Kebitsamang Anne Sere, I. C. (Friday, 01 December 2017). The causal and cointegration
relationshipbetween government revenue and government expenditure.
"Public and Municipal Finance (hybrid)"
,Volume 6 2017, Issue #3, pp. 23-32.
4.

93
GOVERNMENT FUNDING
Kipilimba, T. F. (Dec. 6, 2017). Impact of Tax Administration Towards Government
Revenue in Tanzania-Case of Dar-es Salaam Region.
Social Sciences. Vol. 7,
, No. 1, 2018, pp. 13-21. doi:10.11648/j.ss.20180701.13. Retrieved
fromhttp://www.sciencepublishinggroup.com/journal/paperinfo?
journalid=202&doi=10.11648/j.ss.20180701.13
5.

Samwick, W. G. (Monday, February 1, 2016).
Effects of Income Tax Changes on Economic Growth.
Retrieved
fromhttps://www.brookings.edu/wpcontent/uploads/2016/07/09_Effects_Income_Tax_Chan
ges_Economic_Growth_Gale_Samwick_.pdf
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Oliver Morrissey, C. V. (12 MAY 2016). Tax Revenue Performance and Vulnerability in.
The Journal of Development Studies, 52:12, 1689-1703
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A STUDY ON TAXATION AS A MAJOR SOURCE OF

Taxation, imposition of compulsory levies on individuals or entities by governments.

Taxation is an essential part of government funding, providing the resources necessary

Taxation is referred to as a major source of government funding. It is referred to as the

The main characteristics of tax are-

Taxation is an important tool for government funding because it allows governments to

According to Winfery (1991), “Tax is regarded as a compulsory charge imposed by the

Buhari (1993) defined tax as “a compulsory contribution from individuals and/or

On the following sources of income inside or outside Nigeria:

(d) Dividends, interests or discounts.

(e) Pensions, charges or annuities.

(f)Any profits or gains not falling within the preceding categories.

IV. CLASSES OF TAXES

=> DIRECT AND INDIRECT TAXES

What Are Examples of Direct Taxes?

PROFESSIONAL TAX: This employment tax is levied on those who practice a

ENTERTAINMENT TAX: This is tax that is levied on television series, movies,

REGISTRATION FEES, STAMP DUTY, TRANSFER TAX: These are collected in

EDUCATION CESS: Education Cess is levied to fund the educational programs

Taxation provides the government with the necessary resources to undertake

ECONOMIC DEVELOPMENT: Economic Development is one of the most important

Capital formation is considered a fundamental pillar of economic progress. However,

NON- TAX OBJECTIVES: Non-Tax Revenue is the recurring income of the

BALANCE OF PAYMENT (BOP) PROBLEMS ARE REDUCED: Rising current

FULL EMPLOYMENT: Because the level of employment is determined by effective

REDISTRIBUTING INCOME: A taxation is a tool that can be used to redistribute

CONTROLLING INFLATION: By increasing taxes, the government can reduce the

ENCOURAGING INVESTMENT: The government can provide tax incentives to

The researcher in carrying out this study encountered numerous problems,

RESPONSESBYTHE RESPONDENTS: Another constraint to the researcher is that

Education System: Abnormalities surrounding the educational system in Nigeria in

Lack of Cooperation: Finally, is lack of cooperation with the researcher encountered by

IX. TAX EVASION LAWS AND IMPLICATIONS

SOME OF THE TERMS DEFINED:

Revenue: This is the gross receipt or receivable of a governmental unit derived from

Tax: The oxford advanced learners dictionary of current English Defines tax as “(sum of

This was promulgated in 1961 since been amended.

X. THE PROS AND CONS OF TAXATION

XI. IMPORTANCE OF TAXATION

Taxation is an essential component of government funding, providing the revenue

XII. CHALLENGES OF TAXATION

XIII. PRINCIPLES OF TAXATION

In The Wealth of Nations (Book V, chapter 2) he set down four general canons:

XIV. THE FUTURE OF TAXATION

Taxation is an essential component of any modern society, providing governments with

Where does the Government get the money it spends?

The paper examines the impact of tax administration on government revenue in

II. TAXATION AND DEMOCRACY

Taxation is a fundamental aspect of democracy because it allows the government to raise

IV. THE ROLE OF TAXATION IN GOVERNMENT FUNDING

V. THE HISTORY OF TAXATION

VI. THE FUTURE OF TAXATION

II. STATEMENT OF THE PROBLEM

III. HOW TAXES ARE COLLECTED

IV. THE ROLE OF TAXATION IN GOVERNMENT FUNDING

V. THE BENEFITS OF TAXATION

While taxation is a necessary component of government funding, it also has its

VII. TAXATION AND ECONOMIC GROWTH

Taxation is a crucial factor in economic growth. Although taxation can be seen as a

VIII. TAXATION AND SOCIAL WELFARE

IX. TAXATION AND GOVERNMENT SPENDING

X. TAXATION IN DIFFERENT COUNTRIES

XI. TAXATION AND POLITICS

XII. THE FUTURE OF TAXATION