EFFECT OF TAX REVENUE ON ECONOMIC DEVELOPMENT: EVIDENCE FROM NIGERIA

Abstract

The main objective of this study is to ascertain the effect of Tax Revenue on Economic Development with a focus on Nigeria. The specific objectives were to determine; the effect of Companies’ Income Tax on Per Capita Income, Petroleum Profit Tax on Per Capita Incomeof Nigeria from 2000-2019. This study employed the use of time series data and Ex-post facto research design was adopted. Secondary data were sourced from Central Bank of Nigeria (CBN), Statistical Bulletin, Federal Inland Revenue Service (FIRS), World Bank Statistical Bulletin and Annual Abstract of Statistics from the National Bureau of Statistics (NBS). Inferential statistics of the hypotheses were carried out with the aid of E-views 10 statistical software using Ordinary Least Square (OLS) regression analysis, Granger Causality test. The study found that companies’ income tax has a significant positive effect on per capita income of Nigeria; petroleum profit tax has a significant positive effect on per capita income of Nigeria; It was recommended inter alia that federal government of Nigeria should underpin public financial management reforms, strengthen supervisory and transparency practices, improve tax administration, and fight tax evasion.