Tax Revenue and Economic Growth in Nigeria

Abstract

This study examined the relationship between tax revenue and economic growth in Nigeria. The specific objective of this study was to investigate whether company income tax, petroleum profit tax, and value-added tax have a significant impact on gross domestic product per capita in Nigeria. The study utilized secondary data sources, specifically time series data. Data were gathered from the Federal Inland Revenue Service and the CBN Statistical Bulletin for the study period, 2014-2023. The study employed the Ordinary Least Squares technique in the analysis of data. Findings revealed that company income tax, petroleum profit tax, and value-added tax have a significant effect on gross domestic product per capita in Nigeria. The study recommended, among others, that the Nigerian Federal Inland Revenue Service (FIRS) should preserve the existing framework of Corporate Income Tax and contemplate incentives for profitable enterprises to reinvest in domestic industries, thereby enhancing economic growth, and that the Nigerian government should reform its petroleum sector by improving efforts to process crude oil and only sell refined oil in the international market.