INCOME TAX ON THE ECONOMIC DEVELOPMENT OF NIGERIA (A CASE STUDY OF KWARA STATE INLAND REVENNUEC SERVICE)

This study examines the impact of income tax on the economic development of Nigeria, using the Kwara State Internal Revenue Service (KWIRS) as a case study. Income tax constitutes a major source of public revenue and plays a critical role in funding government activities such as infrastructure development, social services, and economic growth initiatives. Despite its importance, tax administration in many parts of Nigeria continues to face challenges including tax evasion, inadequate enforcement, weak public awareness, and administrative inefficiencies. The study investigates the effectiveness of income tax collection by KWIRS, the level of taxpayer compliance, the influence of tax administration reforms, and the extent to which tax revenues contribute to developmental projects within the state. Findings indicate that improved tax administration and increased revenue mobilization have a positive relationship with economic development, particularly through enhanced government capacity to provide public goods and promote sustainable growth. However, structural constraints such as limited coverage of the informal sector, inadequate technology, and poor taxpayer attitudes continue to limit optimal revenue performance. The research concludes that strengthening income tax policies, enhancing enforcement mechanisms, deepening public enlightenment, and improving transparency in the utilization of tax revenue are essential for maximizing taxation’s contribution to Nigeria’s economic development. Recommendations are offered to guide policymakers and tax authorities toward a more efficient and development-oriented tax system.