Tax Revenue, Wage Employment and Economic Growth in Nigeria

Johnson Nchege ,Ebikabowei Biedomo Aduku ,Ezinne Orie Idika ,Stephanie Chizoba Nwosu

doi:10.7176/jesd/10-10-11

Abstract

This study examines the relationship between tax revenue, wage employment, and economic growth in Nigeria from 1981 – 2016 using the OLS technique. Tax revenue was captured by government non-oil revenue, while wage employment and economic growth were proxied by Wage and salaried workers (employees) and real GDP respectively. Empirical results showed that tax revenue, wage employment and foreign direct investment had a positive and significant impact on real GDP, while inflation rate had a negative and insignificant impact on real GDP. On the basis of the above, the study recommended the introduction of more programs like the Voluntary Asset and Income Declaration Scheme (VAIDS). Also, revenue from tax should be invested in projects that would generate employment opportunities for the people, especially the youths. Keywords: Tax Revenue, Wage Employment, Economic Growth. DOI : 10.7176/JESD/10-10-11 Publication date :May 31 st 2019

Highlights

All over the World, the tax is a common source of revenue for governments
The focus of this study is to examine the relationship between tax revenue, wage employment and economic growth in Nigeria
Since the t-value is greater than two in an absolute sense, the null hypothesis of tax revenue having no significant impact on economic growth is clearly rejected at the 5 per cent level

Summary

Introduction

All over the World, the tax is a common source of revenue for governments. Services provision is a core function of every government at all levels, which are commonly paid for by revenue from the tax. Sales, licensing or income taxes, for example, are imposed by the government to fund services that include road maintenance and expansion, social assistance and Security benefits and education. Tax revenue aids governments in their role in developing infrastructure. Modernization and improvement of areas of national significance like strengthening and maintenance of the integrity of the highways of the country are funded through revenue from tax amongst other sources (Fuentes, 2018). Tax revenue makes it easier for governments to build modern infrastructures in global standards. Revenue generated from the tax is used in funding public goods for the benefit of the entire populace

Methods

Results

Conclusion