CHAPTER ONE

GENERAL INTRODUCTION

1.0       INTRODUCTION

FISCAL as a word has two etymologies,1 and it relates to taxation, public revenues or public debt management and policies.2 Normally, we speak of fiscal policy, which is a deliberate governmental action that attempts consciously to control the actions of individuals and companies by means of spending and taxation decisions. It has been stated that the expenditure side of fiscal policy could be achieved by spending money

in ways that stimulate other activity.3 Whereas fiscal policy as it relates to taxation can affect work, investment or production decisions by changing tax rates and levels.

Thus, fiscal policy effectually strikes a balance between the resources the government puts into the economy through expenditures and that it takes out through taxation, charges or borrowing. When government takes the bold step of concretising its fiscal policy the end product is laws, for instance tax laws, or policy statements, for instance budgets. For our purposes, we are concerned with the fiscal policy as it relates to what the government takes out through taxation. In other words, any reference to fiscal laws in this work means those laws that touch upon taxation, and more specifically the taxation of petroleum operations in Nigeria.

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