Tax Revenue and Economic Growth of Nigeria
Journal Title: Scholars Journal of Economics, Business and Management - Year 2017, Vol 4, Issue 10
Abstract
Abstract:The dwindling price of Crude oil has lowered the revenue generation to government thereby, impacting negatively on the Nigeria economic growth. To this end, the government opted for other alternative source of growing her economy through taxation. Broadly, the study focused on tax revenue and economic growth in Nigeria. The specific objective of this paper was to explore the effect of income tax revenue on the economic growth of Nigeria, proxied by Gross Domestic Product (GDP). Data were collected from secondary sources, that was, the Statistical Bulletins of Federal Inland Revenue Service and the Central Bank of Nigeria respectively for the period 1995 to 2015[27]. Econometric Model of Multiple Linear Regressions and Ordinary Least Square (OLS) technique were adopted to explore the relationship between GDP (the dependent variable) and a set of government income tax revenue heads over the period 1995 to 2015. Our findings showed that tax revenues that determine government economic growth are Petroleum Profit Tax and Company Income Tax. This implies that taxes that have positive effect on economic growth are direct taxes, thus direct taxes exert more significant effect on economic growth of Nigeria than indirect taxes. The anomaly was attributed to dysfunctionalties in the income tax system, loopholes in tax laws and inefficient tax administration. It was recommended that tax policymakers and regulatory bodies should strengthen the legal and regulatory framework in order to control tax evasion and avoidance by taxpayers. Also, strategies should be adopted to improve on the system of tax administration to increase tax revenue generation in Nigeria. Keywords:Tax Revenue, Gross Domestic Product, Economic Growth,Economic Development.
Authors and Affiliations
Amos O. Arowoshegbe, Uniamikogbo Emmanuel, AigienohuwaOsarenren Osasere
Keywords
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