Impact of Taxation on Revenue Generation in Nigeria
DOI:
https://doi.org/10.61143/umyu-jafr.8(1)2025.017Keywords:
Taxation, Revenue generation, Value added tax, Company income tax, Custom and excise duty, Federal government generated revenueAbstract
The government's drive to earn more income prompts it to consider boosting taxes from sources other than oil. This research studied the influence of taxation on revenue generation in Nigeria during a 43-year period, from 1981 to 2023. The study used an ex-post facto research approach, with data acquired from the Central Bank of Nigeria and the Federal Inland Revenue Service's yearly statistics bulletin. The study used a variety of estimating methodologies, including descriptive and inferential statistics, to assess the short and long-term link between taxes and revenue production in Nigeria. The study found that Value added tax, company income tax has positive and significant impact on revenue generation, whereas customs and excise duty has negative and insignificant impact on revenue generation. The study found that taxes is an effective and predictable weapon in the hands of the government for increasing revenue generation in the country. The study recommends that federal inland revenue services must close VAT revenue leakages, educate company managers on the importance of remitting VAT revenue, and train personnel in charge of collecting VAT revenue so as to increase revenue generation in the country.
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