ABSTRACT

This study focuses on the Impact of personal income tax on the Nigeria economy, a study of Abia State. What prompted me to this research topic are the following problems; Tax evasion and avoidance by most registered companies and some individuals has however affected the revenue base of the government especially, in providing essential services in the society and also the Ineffective and inefficient administration of personal income tax in Abia State. The main objective of the study is to examine the extent of Personal Income Tax revenue on total revenue generation in Abia State. In carrying out the research, data were collected from secondary source, which was the five years (2010-2014) financial statement of the Board of Internal Revenue, Abia State. Ex-post facto research design was used. Simple regression was used for testing the hypothesis. The empirical test showed that; actual personal income tax revenue does have a significant impact on total revenue generated and budgeted personal income tax revenue does have a significant impact on total revenue generated. Thus, it is recommended that Government should try and appoints capable and worthy hands that can manage and curb the high level of fraud encountered in tax collection. Finally, government should try as much as possible to reduce the tax rate in production sectors in order to improve the local industries.