Abstract
The paper employs ordinary least squares technique to investigate the impact of tax revenue on public service delivery in Nigeria from 1981 to 2017. The specific objective is to determine the extent to which tax revenue influences service delivery indicators such as education and health care services in the country. The findings reveal that tax revenue impacts positively and significantly on education and health care services. The study therefore recommends among others that the government should exploit all tax revenue sources and use same to maintain the health sector in the country and provide adequate education including skill acquisition and entrepreneurship development programmes for the citizens.
Highlights
Tax revenue is an influential instrument of economic transformation and a key player in every economy globally
The findings revealed that tax revenue has positive impact on economic growth in Nigeria
Arowoshegbe, Uniamikogbo and Aigienohuwa (2017) considered the impact of tax revenue on Nigeria’s economic growth from 1995 to 2015, using Ordinary Least Squares (OLS) method for estimation, the findings revealed that petroleum profit tax and company income tax exerted significant influence on economic growth more than the indirect taxes
Summary
Tax revenue is an influential instrument of economic transformation and a key player in every economy globally. The governments of the African countries initiated this move to be able to collect reliable data on service delivery in schools and health facilities. The primary aim of a tax system is to finance public goods and services, promote efficient distribution of resources, reduce income inequality, and to stabilize the economy (Musgrave, 2006) Besides these backdrops, Chigbu, Akujuobi and Appah (2012) argued that apart from generating revenue, a tax system is used as a fiscal policy tool to influence investment direction and regulate the production and consumption of certain goods and services. The government lacks maintenance culture as the facilities already provided are not maintained, so they feel there is no commensurate benefit to be derived from tax payment compliance Based on this premise, most individuals and firms practice tax avoidance and evasion which results to reduction in government revenue
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