IOSR Journal Of Humanities And Social Science (JHSS) ISSN: 2279-0837, ISBN: 2279-0845. 5olume 5, Issue X (Nov. - Dec. 2012), PP 60-70 Www.Iosrjournals.Org www.iosrjournals.org 60 | Page Taxation As A Fiscal Policy Instrument For Income Redistribution Among Lagos State Civil Servants. (A Case Study of Lagos State Civil Servants) 1 Olusanya Samuel Olumuyiwa, 2 Peter Medunoye, 3 Oyebo Afees Oluwatosin Lecturer Economics department Lagos State University, External System. Assistant Director Lagos State Pension Commission Lecturer Marketing Department, Lagos State University, External System Pension Officer, Lagos State Pension Commission Abstarct: The research study vividly looks at Taxation as a Fiscal Policy Instrument for Income Redistribution among Lagos State Civil Servants, a case study of Lagos State Civil Servant. However, the research study make use of primary data analysis and questionnaire were distributed to one hundred and fifty (150) respondents civil servant employee of Lagos State Government and spearman’s rank correlation coefficient was adopted as the estimation techniques. More over, the objectives of the study is to examine whether taxation as a fiscal policy instrument can be used for income redistribution among the Lagos civil servants and also to examine whether Income re-distribution can improve the welfare of Lagos State Civil Servants. More so, two research hypotheses were tested using Spearman’s rank correlation coefficient using 5% level of significance and the result revealed that taxation as a fiscal policy instrument can be used for income redistribution among the Lagos civil servants and that income re-distribution has help to improve the welfare of Lagos State Civil Servants. Therefore the study then recommend and concludes that Government should create a transparent and accountable system to ensure that tax is used to build a more equitable society, redistribute wealth and attract investment flows into the state and Government should bridge the gap between the rich and the poor by taxing the rich high and using the tax proceeds to provide basic amenities for the masses in Lagos State. Keywords: Taxation, Fiscal Policy issue, Income-redistribution, Investment flow, Wealth, Welfare, Civil Servant. I. Introduction Income redistribution by the price-mechanism will normally tilt in favour of those whose labour, by virtue of natural ability and acquired education and skills, command high wages. This implies that without government intervention, some people in our society who have less ability due to low level of education and training received, the aged who were not able to accumulate or inherit large property resources and those who are physically and mentally handicapped will receive no income at all through the price system. Thus, the price system promotes income inequalities thereby creating poverty and agony amidst overall plenty in the economy (Adebayo, 1999). In view of the foregoing, government therefore, intervened to correct unjust inequality of income through the introduction of tax system, among other programmes, which is designed to take more from the rich and less from the poor. Taxation as a concept involves more than the mere imposition of the compulsory payment of sums of money by the government or its agents. It is the sum total of the assessment of tax, the imposition of compulsory sums of money by the government or its agents. It is the sum total of the assessment of tax, the imposition of compulsory sums of money by the government or its agencies on individuals and firms, the collection of and the accounting for the levied amounts and the keeping and auditing of tax records (Anyanwuocha, 1993). Different taxes contribute to the attainment of different objectives. Thus, some taxes would help in the redistribution of income and wealth more equitably. A tax which tries to reduce income inequalities might discourage savings and investment and thereby retard capital accumulation and economic growth. It is, therefore, necessary that a judicious mixture of taxes be chosen so as to minimize their possible ill effects and strengthen their beneficial effects for the economy (Lawal, 2005). This research work is an attempt to critically review the evolution and development of taxation in Nigeria, rules, concept and objectives of taxation, identify the attendant problems in the tax system and the manner in which taxation is being used as a fiscal policy instrument for income redistribution and economic development. It is intended to offer suggestion at improving the overall Nigeria tax system in order to enhance