Abstract
Economic recession has eaten deep into the economy to the extent that taxes generated cannot serve as a pivot upon which the economy could strive. This study examines how economic recession can be managed through effective tax collection. Secondary data was obtained from the CBN statistical bulletin between periods of 2003 to 2016. Regression technique was used in testing the data collected with the aid of E-VIEWS. The study revealed that taxes do not have significant positive effect on the nation’s Gross Domestic Product, Government Spending, Capacity Utilization and Money Supply. Thus, it implies that taxes in Nigeria are rather unfortunately underexploited, which is an indication of poor tax collection system. This study therefore concludes that, tax should be considered as the urgent and needful panacea to rescue the current economic illness that Nigeria is currently facing. This should be done by ensuring that relevant tax authorities have good tax collection system like effective tax data base, effective E-tax registration, effective E-tax payment and all tax payers should have tax identification number.
Highlights
IntroductionThe Nigeria economy has been hit hard by recession caused by excessive imports, plunging oil revenue and sharply low investments inflows (Agri, Mailafia, & Umejiaku, 2017)
The Nigeria economy has been hit hard by recession caused by excessive imports, plunging oil revenue and sharply low investments inflows (Agri, Mailafia, & Umejiaku, 2017).The country started moving towards recession in 2013 when the price of crude oil began rolling downwards from US $118 per barrel
The data was obtained from the Central Bank of Nigeria (CBN) statistical bulletin, National Bureau of Statistics (NBS) on line publications, statistics from office of Accountant general of the Federation and Federal Inland Revenue Service (FIRS). 3.1 Model Specification Multiple regression analysis was used to analyze the linear relationship between the dependent variable and independent variable
Summary
The Nigeria economy has been hit hard by recession caused by excessive imports, plunging oil revenue and sharply low investments inflows (Agri, Mailafia, & Umejiaku, 2017). A recession has many attributes that can occur simultaneously and includes decline in component measure of economic activity such as corporate investment decisions, government spending, employment level, capacity utilization, business profit, money supply, household income, interest rates, Gross Domestic Income (GDP) and net export activity. All these are macroeconomic indicators which influence negative economic growth. Economist Koo (2009) wrote that under ideal conditions, a country’s economy should have the household sector as net savers and the corporate sector as net borrowers, with the government budget nearly balanced and net exports near zero When these relationships become imbalanced, recession can develop within the country or create pressure for recession in another country. The issue here is that, are these taxes effectively collected and are they enhancing all these macroeconomic indicators which influence negative economic growth?
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