An Analysis of Taxation and Economic Growth in Nigeria
DOI:
https://doi.org/10.61143/umyu-jafr.3(1)2022.009Keywords:
Petroleum profit tax, Company income tax, Value added tax, Custom and excise duty, Economic growthAbstract
The paper examined the impact of taxation on the economic growth of Nigeria. The study design was ex-post facto. Secondary data was gathered from Federal Inland Revenue Services and CBN Statistical Bulletin for the years of the study 1999 to 2020. The study employed the Ordinary Least Square (OLS) technique in the analysis of data. The results were that CIT has a negative impact on Real Gross Domestic Product (RGDP). Petroleum Profit Tax (PPT) offers a positive but insignificant effect on RGDP and there is a positive but insignificant impact of Value Added Tax (VAT) on economic growth in Nigeria. Custom and Excise Duty (CED) has a negative and insignificant effect on RGDP in Nigeria. It was concluded that taxation has a weak impact on the economic growth of Nigeria. It is recommended that the Nigerian government should restructure its petroleum sector by intensifying efforts at processing crude oil and only selling processed oil to the international market and that there should be greater transparency by the government on the management and utilization of tax resources to give taxpayers greater assurance of its application. Also, there should be an enhancement of Nigeria's tax administrative management efficiency by blocking leakages in tax revenue collection and the expansion of the nation's tax base to attract more tax revenue.
Metrics
References
Abata, M. A. (2014). The impacts of tax revenue on Nigerian economy. Journal of policy and Development Studies. 9(1), 109-123. https://doi.org/10.12816/0011186
Anisere-Hameed, R. A. (2021). Impact of taxation on the growth and development of the Nigerian economy, European Journal of Accounting, Auditing and Finance Research, 9(4),1-11.
Anyanwu, J., & Anyanfo, O. (1996). Personal income tax and economic growth. Onitsha: Joeanee Publishers.
Bureau of Economic Analysis. (2015). Measuring the economy: A primer on GDP and the national income and product accounts. Retrieved from https://www.bea.gov/national/pdf/nipa_primer.pdf.
Edame, M. A.,&, Okoi, J. R. (2014). Impact of tax on investment and economic growth in Nigeria. Journal of Public Economics .8(2), 27-44. https://doi.org/10.5901/ajis.2014.v3n4p209
Edewusi, D. G. & Ajayi, I. E. (2019). The nexus between tax revenue and economic growth in Nigeria. International Journal of Applied Economics, Finance and Accounting, 4(2), 45-55. https://doi.org/10.33094/8.2017.2019.42.45.55
Egbunike, F. C., Emudainohwo, O. B., & Gunardi, A. (2018). Tax revenue and economic growth: A study of Nigeria and Ghana. Signifikan: Jurnal Ilmu Ekonomi, 7(2), 213- 220. https://doi.org/10.15408/sjie.v7i2.7341
Goode, R. (1984). Government finance in developing countries. Washington D.C: The Brookings Institute.
Haller, A. (2012). Concepts of economic growth and development. challenges of
crisis and of knowledge. Economy Transdisciplinarity Cognition, 15(1), 66-71.
Joseph, F. I. & Omodero, C. O. (2020). Nexus between government revenue and economic growth in Nigeria, Economics and Business, 34, 35-45. https://doi.org/10.2478/eb-2020-0003
Karumba, A. K. (2016). Impact of taxation on economic growth in Kenya (1975-2014). An Unpublished Thesis, University of Nairobi, Kenya.
Kiabel, B. & Nwokah, N (2009). Boosting revenue generation by state governments in Nigeria: The Tax Consultants option revisited. European journal of social science, 8(4), 532 - 539.
Lerato, R. (2016). The relationship between tax and economic growth: A South African perspective. An Unpublished Thesis, University of Cape Town, South Africa.
Mamuda, A. U. & Alhassan I. (2021). Tax Revenue and its Impact on the Economic Growth of Nigeria, International Academic Journal of Management and Marketing, 6(6), 112 - 123.
Ogundana, M. O., Ogundana, M. O., Ogundana, M. O., Ibidunni, S. I., & Adetoyinbo, A. A. (2017). Impact of direct and indirect tax on the Nigerian economic growth. Binus Business Review, 8(3), 215-220. https://doi.org/10.21512/bbr.v8i3.3621
Ojong, C., Anthony, M, O & Arikpo, F. (2016). The impact of tax revenue on economic growth: Evidence from Nigeria. Journal of Economics and Finance, 1(1), 32 - 38.
Okonkwo, I. V. & Chukwu, K..O. (2019). Government tax revenue and economic development in Nigeria. International Journal of Research in Business, Economics and Management, 3(3), 91 - 105.
Olapade, C. S. (2010). Income tax laws for corporate and unincorporated bodies in Nigeria. Ibadan: Heinemann Educational Books Limited.
Onakoya, A. B., & Afintinni, O. I. (2016). Taxation and economic growth in Nigeria. Asian Journal of Economic Modelling, 4(4), 199-210. https://doi.org/10.18488/journal.8/2016.4.4/8.4.199.210
Onaolapo, A. A., Fasina, H. T., & Adegbite, T. A. (2013). The analysis of the effect of petroleum profit tax on Nigerian economy. Asian Journal of Humanities and Social Sciences, 1(1), 25-36.
Todaro, M.P. & Smith, S.C. (2006). Economic development, 11th ed. Addison- Wesley.
Tosun, S., & Abizadeh, S. (2005). Economic growth and tax components: An analysis of tax changes in OECD. Applied Economics, 35(19), 2251-2263. https://doi.org/10.1080/00036840500293813
Unegbu, A. O., & Irefin, D. (2011). Impact of VAT on economic development of emerging Nations. Arabian Journal of Business and Management Review. 1(9).23 - 41.
Uzoka, P. U. & Chiedu, C. O. (2018). Effect of tax revenue on economic growth in Nigeria, International Journal of Social Sciences and Management Research. 4(7), 17 - 24.
Yahaya, K. A., & Bakare, T. O. (2018). Effect of petroleum profit tax and companies income tax on economic growth in Nigeria. Journal of Public Administration, Finance and Law, 13(1), 100-121.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2023 UMYU Journal of Accounting and Finance Research
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
