Assessment of Problem of Tax Administration in Nigeria Economy (a Case Sturdy of Federal Inland Revenue)

TABLE OF CONTENT Title Page i resolving ii Dedication iii Acknowledgement iv Abstract v Table of content vi CHAPTER wiz INTRODUCTION 1. 1 minimise of the field of battle 1. 2 kingdomment of the caper 1. 3 Objective of the larn 1. 4 Research question and hypothesis 1. 5 Scope of the study 1. 6 Significance of the study 1. 7 Definition of barriers 1. 8 Plan of the studyCHAPTER TWO LITERATURE REVIEW 2. 1 intro 2. 2 Review of the Nigerian bang-up grocery store 2. 3 flummox support Prospect, Benefit, And Associated Risk 2. 4 The impediment and problem of Bond victimisation in Nigeria 2. 5 novel trainings in the Nigerian Bond grocery 2. 6 Theoretical cloth 2. 7 summary of the chapter CHAPTER THREE RESEARCH ruleological analysis 3. 1 Introduction 3. 2 Research Design 3. 3 Sources and rules of education Collection 3. 4 Methods of Data Analysis 3 . 5 Justification For the Method utilize 3. 6 succinct of the Chapter CHAPTER FOUR DATA PRSENTATION AND ANALYSIS 4. 1 Introduction 4. 2 Data pledgeation And Analysis 4. Hypothesis And place testing 4. 4 Discussion on Research Findings 4. 5 Summary Of Findings CHAPTER FIVE SUMMARY, CONCLUSION AND RECOMMENDATION 5. 1 Summary 5. 2 culmination 5. 3 Limitation Of The Study 5. 4 Recommendation 5. 5 References CHAPTER ONE INTRODUCTION 1. 1 BACKGROUND OF THE require The importance and centrality of the fiscal dust to the growth of any sparing is obvious and indisputable. It has been postulated that a well essential financial system performs several critical functions that farmd the efficiency of their financial in terminati peerlessdiation roles with highly reduced costs of information, transaction and monitoring.Also, it promotes investment by identifying and locating viable business opportunities helps in mobilizing savings monitors the performance of managers at that placeby enabling trading, hedging and diversification of risk in order to facilitate the exchange of goods and services. These functions result in efficient allocation of resources and rapid assembling of physical and human capital with faster technological process which in turn feed economical growth. The financial food mart is a sub-set of the financial system where cash in hand from surplus economic units be pooled and made on tap(predicate) to deficit units at a cost. The financial market consists of the money and the capital markets.The money market is the market for short term cash with a maturity period of not more than a year. The Capital food market consists of institutions and procedures that try for transactions in prospicient term financial instruments with a maturity of more than one year. The study instruments that atomic number 18 used in raising funds in the Nigeria Capital Market include Debts giving medication bonds (Federal, State and Local Governments), I ndustrial loan stocks or Debentures, Preference Stocks, and Equities mundane shargons. Instruments classified as Debt securities are generally referred to as bonds because of their fixed income characteristics except for preference stock which is a hybrid instrument.Therefore investors in bonds are essentially lending money to the issuer. Some of the common bond issuers are governing bodys (Federal, State and Local Government), governance agencies and corporate institutions. There are different types of bonds with its alone(predicate) features relating to the way it pays interest, the market in which the bond is issued, the currency it is payable in, antifertility features and the legal framework under which it operates. The bond market is the channel through and through which government and corporations that need to borrow money are matched with investors who have funds to lend. There are really two markets for bonds THE PRIMARY AND THE SECONDARY MARKET.The develop nature of the Nigerian Bond market is reflected through the depth of the market, escape of investors confidence, inflationary pressure coupled with continuous depreciation of the Naira, absence of major(ip) international rating organization, absence of secondary trading market, macro-economic instability and unappealing nature of the market to external actors. All these indices indicate the faulty basics of the market and hence its inability to contri hardlye materially to the growth and emergence of the Nigerian economy as it obtains in other developed countries of the realism like Europe and United States of America. The ready of reviving theNigerian Bond market on the Nigerian economy cannot be overemphasized as it will enhance the graspment of a transformed economy through provision of gigantic term funding to government and corporate borrowers, foreign investment, participation in the global bond market and international capital flow. However, how fast the Nigeria government and financial authorities move to combat the faulty fundamentals of the market will determine its efficiency and effectiveness as a major provider of the recollective term finance needed for Nigerias economic growth. In Nigeria, one major defect for the slow pace of schooling of the real sector which is prerequisite to bring ab bulge a bear on economic growth and development is inadequate finance.It is therefore pertinent to check theoretically and comparatively the roles the Nigerian Bond market can calculate in the growth of the Nigerian economy with a view of assessing the effect of bond market development in an imperative way to achieve a transformed economy. 1. 2 STATEMENT OF THE PROBLEM The major problem that brought about slow movement of developing the real sector of Nigeria which is necessary to bring about a sustained economic growth and development is inadequate finance. This can be traced largely to the underdeveloped state of the Debt incision of the Nigerian Cap ital Market which is supposed to serve as the fomite for the mobilization and provision of massive-term funds needed by two government and corporate organizations to embark on developmental projects needed for economic growth and development.The underdeveloped state of the bond element of the Nigeria capital market has in time past led to distortions in the economy as most corporate organizations sourced their long term funds from commercial banks. This in effect is a financial mismatch funding strategy where long term projects are funded with short term finance. The commercial banks are set-up to provide only short term funding due to the nature of their sources of funds whereas the kind of finance needed for sustainable development are long term funds. Also, because there is no developed outlet for the sourcing of long term funds by corporate organizations, there is overdependence on government to regularize and direct the pace of economic development.Thus, business activities are predicated on overt expenditure projections and when these projections and budgets are delayed or not forthcoming, economic activities in the whole economy is directly adversely falled. 1. 3 OBJECTIVE OF THE STUDY The major objective of this study is to assess the effective development of the Nigerian bond market and it essential effect on the growth of the economy is however the task of this study. other(a) objective is to, (i) Find out whether there exist an optimal economy whereas bond market can be developed. 1. 4 RESEARCH QUESTION AND HYPOTHESIS In line with the interrogation problem, most specific questions must receive answers in the course of the study.These questions are as follow (i) How does development of Nigerian bond market affect economic growth? (ii) Does inadequate finance result from underdevelopment state of debt segment in the Nigerian capital market? 1. 4. 1 HYPOTHESIS Ho There is no significant relationship between effective development of the Nigeri an Bond market and economic growth. H1 There is a significant relationship between effective development of the Nigerian Bond market and economic growth. 1. 5 SCOPE OF THE STUDY This research is carried out in the first place on Nigerian capital market to assess the development on fund to the Nigerian economy it covers data sourced from Nigerian stock exchange, yearbook report, Security and exchange commission and National News paper.It covers the period of eighter from Decatur years (2000- 2008) 1. 6 SIGNIFICANCE OF THE STUDY The important of this study cannot be overemphasized owing to the value of a research on this nature. To the end, this research is carried out to bring to the attention of financial managers of the firms especially financial institutions, relevant information regarding to Bond market and economy development in order to service in making financial decision. 1. 7 DEFINITION OF TERMS (i) Bond A bond is simply a certificate of indebtedness issued by a borrower to a lender. (ii) Capital Market This is the market for intermediate and long term securities that have more than one year of maturity express three years. iii) Debt This is referred to as an obligation owed by one party (the debtor) to a second party the creditor. (iv) Debenture This is referred to as type of bond that is not secured by physical asset or collateral, it is credit worthiness and composition of the issuer. (v) Equity this referred to as the residual claim or interest of the secondary class of investors in asset after all liabilities have been compensable. (vi) monetary Market The financial market is a sub-set of the financial system where funds from surplus economic units are pooled and made available to deficit units at a cost. (vii) Money Market This market is the market for short term funds with a maturity period of not more than a year. (viii) Preference Stock ix) Primary Market This is referred to as the market where securities are newly issued. (x) Seconda ry Market This is referred to as the market where existing securities are traded. 1. 9 PLAN OF THE STUDY This research project is divided into tailfin (5) chapters for better and easy understanding, chapter two (2) is the review of related literatures the literature is reviewed with a view to lay a foundation for the building of new research that we are currently undergoing. It gives directions and light to research work. Chapter three (3) tell us about the method(s) of research used in this project. It shows the research design, source of data, method of data collection, and techniques of data analysis among others.Chapter four (4) is mainly the presentation of data and the analysis. Here our research hypothesis will be tested in order to enable us draw a conclusion on the topic under consideration. The final chapter which is chapter five (5) will highlight on the conclusion, summary and recommendation. CHAPTER TWO LITERATURE REVIEW 2. 1 Introduction A bond is a debt aegis in whi ch the issuer owes the holder a debt and is cause to repay the principal and interest (coupon) at a later exit, termed maturity. Other stipulations may also be attached to the bond issued, such as the obligation of the issuer to provide certain information to the bondholder or limitations on the demeanour of the issuer.Bonds are generally issued for a fixed term (the maturity) longer than one year (Olashore, 2006). Umoren (2000) also defines a bond as basically IOUS of longer duration than the average money market instrument present in a given market. According to Fahm (2006), a bond is a long term debt instrument issued by an entity, company or government as evidence of a promise to pay. The claim protects the holder in circumstances in which the issuer is unable to pay the amount due. According to Oni (2006. ), the entity get money by the way of a bond is called the issuer and the person commit is the buyer. The issuer of a bond promises to pay the buyers interest which is ca lled a coupon for the privilege of using the buyers money.The issuer also promises to dedicate the money which is the principal to the buyer on a specified date called the maturity date. The coupon which is a predetermined interest account is paid to the buyer at periodic intervals throughout the life of the bond. It is the nature of cognise periodic interest amount (coupon) and known principal amount that gave stand out to the nomenclature fixed income securities given to bonds. Corporate bonds are often called debentures, but the term debenture is usually used to refer to borrowings without specified collateral. such(prenominal) borrowings are based on the general credit standing of the borrower. In Nigeria, however, some debentures are said to be mortgage debentures.In such cases, the security provided goes beyond the credit worthiness of the borrowers to include a mortgage of some specific assets and also all future assets (Odife, 1999). 2. 2 Review of the Nigerian capital ma rket 2. 3 Bond financing Prospect, Benefit, And Associated Risk 2. 4 The impediment and problem of Bond development in Nigeria 2. 5 Recent developments in the Nigerian Bond market 2. 6 Theoretical framework 2. 7 summary of the chapter CHAPTER THREE RESEARCH METHODOLOGY 3. 1 Introduction 3. 2 Research Design 3. 3 Sources and Methods of Data Collection 3. 4 Method of Data Analysis 3. 5 Justification for the Method Used 3. 6 Summary of the Chapter