ABSTRACT

This research work aims at evaluating the revenue contribution of taxation of unclassified economic activities in small and medium scale businesses and the extent in which government contributes to the growth and development of small and medium scale businesses. Taxation is the process or machinery by which individuals, communities, group of persons and corporate entities are made to contribute part of their income for the purpose of effective administration and development ofthe society. That is why it is often referred to as civic obligation. Small and medium scale businesses play a very important role in development of the Nigerian economy. They make up about 80% of the economy and serves as a source of employment generation, innovation and economic dynamism. Small scale business is a type ofbusiness that requires very low start- up capital, low turnover and small number of employees. Medium scale business is the result of a successful slow and steady growth of a small scale business. In the process of achieving the objectives of this research work, relevant primary and secondary data were collected through the issue of questionnaires to the staff ofAbia State Board ofInternal Revenue and review of previous works done by scholars respectively. The data collected were analyzed using the Chi- square distribution formula. The results show that revenue contribution of unclassified economic activities does not have any significant effect on small and medium scale businesses and economic development ofNigeria due to the high rate oftaxes charged on them, problems of tax policies and negligence of the informal sector by the government in terms of financial support where necessary. This study also reveals that there are no significant contributions from the government to the development of small and medium scale businesses and also highlights the various problems of taxation and proffered solutions as well as ways ways to properly tax small and medium scale businesses in such a way that it will favour them and increase revenue generation ofthe government.