Non-oil Revenue Research Articles

Non-Oil Tax Revenue on Economic Growth and Development in Nigeria

Globally, government is experiencing difficulties in generating adequate revenue to finance their activities. In Nigeria, studies have shown that the recent sharp reduction in the revenue was as a result of decline in crude oil prices which inversely affected the financial ability of government towards growth and development of the nation. To this end, this paper therefore investigated the effect of non-oil taxes on economic growth and development of Nigeria. The study employed ex-post facto research design. Macro data for the period 1994Q1-2017Q4 representing seventy six (76) observations were obtained from CBN statistical bulletin and National Bureau of Statistics. The documents were already exposed to the scrutiny of the appropriate regulatory agencies. The data were analyzed using descriptive and inferential statistics employing multiple regressions. The study discovered that non-oil taxes (custom and excise duties, capital gain tax, company income tax, tertiary education tax and value added tax) have significant effect on economic growth. (Adj. R2 = 0.75, F(5,71) = 213.43, p< .0.05). The individual effects are also positive and statistically significant: (VAT- β = 8.011, t(76)= 2.802, ρ<0.05, CIT- β = 2.560, t(76)= 2.383, ρ<0.05, CED - β = 1.767, t(76)=3.092, ρ<0.05, CGT- β = 4.162, t(76)= 3.509, ρ<0.05, and TET- β = 0.161, t(76)= 2.443, ρ<0.05). This study concluded that non-oil taxes significantly influenced both economic growth and economic development in Nigeria. The study recommended that government must strive to sustain the current unflinching commitment towards improving non-oil tax revenue, ensure Tertiary Education Tax collected translates into real development and also ensure efficient utilization of tax payers’ money to boost non-oil tax revenue collection which will then lead to economic growth and development.

Rationalizing energy policy reforms in the gulf cooperation council: Implications from an institutional analysis

The Gulf Cooperation Council (GCC) states are undertaking a number of energy policy reforms to cope with challenges from geopolitical tension and oil revenue depletion. These reforms are, however, different from those implemented in the western world for post-oil transition. This paper analyzes post-reformed state control over energy assets and energy transactions to provide an institutional view on the rationality of GCC's unique reform approach. Our study shows persistent but re-programmed state dominance over the energy sector, with energy assets owned either by national oil companies, non-oil state-owned enterprises, or public-private-partnership (PPP) agents with state ownership; and energy transactions governed either by state regulation or PPP contracts in the absence of any market mechanism. This institutional setting may allow the authority to sustain the legacy rentier social contract by expanding state-controlled rent source from oil to non-oil revenue and replacing low-power energy subsidy with high-power state-provided jobs as the rent for transfer. This institutional motivation will ultimately jeopardize market-based reforms and large-scale carbon regulation in the region. We elaborate the theoretical implications and discuss near-term development of GCC's energy policy reforms under the institutional-alignment constraints.

Understanding the Fundamental Issues of Multiple Taxation in Nigeria: The Theoretical and Historical Approach

Taxation has not been fully harnessed in Nigeria years due to oil boom which has been the major source of government revenue. With decline in the revenue from oil, the allocation from the federal account dwindles and has become inadequate for the state and local governments. This, accordingly, re-awakens clarion attention to non-oil revenue source (taxation) in other to boost the revenue account. Consequently, the governments have enacted various forms of tax laws in other to boost her revenue. As a result, there are multiplicities of taxes payable to the Federal, States; and Local Governments. This became apparent as the various tiers of government enacts tax laws that is not within the ambits of their taxing powers; while others in exercising their legitimate taxing power, act in excessive manner that leads to tax proliferation, leaving the taxpayer with burden of paying too many taxes. Some of the taxes are illegal, not in accordance with the law, others are legal, in accordance with the law, but have caused proliferation of taxes in the system. These factors have given rise to multiple taxation with the attendant consequence: scaring investors away and dwindling the rate of tax compliance. There is need to develop an efficient tax system in Nigeria that would be devoid of multiple taxation syndrome. It is against this backdrop that this paper is initiated to examine the possible way out of the problem. The paper adopted doctrinal research methodology. Accordingly, reliance was placed on the study of both primary and secondary sources of law like the constitution, federal and state enactments, text books, journals and newspapers. The paper founds the intricate causes of multiple taxation to include Nigerian Fiscal Federalism, Administration of Road Tax and Illegal Tax Collectors. Keywords: Multiple taxation, road tax, tax collectors DOI: 10.7176/JAAS/64-04 Publication date: May 31 st 2020

Non-oil tax revenue and budget implementation in Nigeria (1997-2016)

The study investigated the effect of personal and company income taxes on total government expenditure. The study covered time period spanning from 1997 to 2016. Data for the study were sourced from Central Bank of Nigeria Statistical Bulletin, as well as the data base of National Bureau of Statistics. The study employed multivariate time series estimation techniques such as the co-integration regression and error correction model (ECM) estimation following pre-test such as unit root test and co-integration test. Result revealed that on the short run, personal income tax exert inconsequential positive influence on total government expenditure 0.075747 (p = 0.7140 > 0.05), but on the long run the impact of personal income tax on total government expenditure become negative though no significant, -0.035629 (p = 0.9162 > 0.05); while company income tax exert unimportant positive effect on total government expenditure both on the short run 5.096910 (p = 0.3082 > 0.05) and long run 6.034018 (p = 0.0613 > 0.05). The study concluded that revenue generation from non-oil taxes in Nigeria do not contribute substantially to maintaining and sustaining full budget implementation in terms of government expenditure.

How the growth of ecotourism has the power to drive economic, cultural and environmental benefits for Azerbaijan

As Azerbaijan’s national strategy has shifted to encourage non-oil revenues, tourism has become one area of focus. While the impact of some tourism activities, such as the influx of visitors during Baku’s Formula 1 or other major sporting events, are both tangible and visible, the value of other tourism sectors may appear less evident. Ecotourism is one such niche. This research shows that ecotourism offers significant potential for development, with benefits for the environment and national brand, as well as stimulation for local economies. Azerbaijan has in abundance the most important attributes required to develop its ecotourism industry: Natural areas of recognised outstanding beauty, rich cultural and gastronomic history, and a stable, welcoming climate. Added to this is the country’s investment in the renovation of historical places and transport links, growth of international languages such as English and improvement in accommodation and tourism infrastructure. This research is supported by data and interviews from public and private sector organisations. But underpinning the potential for growth in Azerbaijan’s ecotourism sector are the country’s natural resources, and there is already evidence from the Ministry of Ecology and Natural Resources that, with coordinated promotion at only minimal levels, the number of foreign tourists visiting the national parks of Azerbaijan are increasing steadily.

Impact of Fiscal Policy on the Economic Growth in Nigeria: An Empirical Analysis

The study investigated the impact of fiscal policy on the economic growth in Nigeria, Annual time series data were obtained from the Central Bank of Nigeria Statistical Bulletin for the period 1981 to 2018 on the variables used for the study. Unit root test was conducted using Augmented Dickey-Fuller test technique and the result showed that the variables were stationary though at different levels. Co-integration test was also conducted using Johanssen co-integration test method and the result showed that the variables in the model were co-integrated implying that the variables have a long run relationship. The vector error correction estimate of short run relationship showed that domestic debt, external debt and non-oil revenue have a positive and significant impact on economic growth while recurrent expenditure and capital expenditure have a negative and significant impact on economic growth. The vector error correction estimate of long run relationship revealed that domestic debt and external debt have a negative and insignificant impact on while recurrent expenditure has a negative and significant impact on economic growth. The result showed that capital expenditure has a negative and insignificant impact on economic growth while non-oil revenue has a positive and significant impact on economic growth. The R-squared value showed that about 80.7 percent of the total variations in the dependent variable were explained by changes in the explanatory variables. The error correction result revealed that the speed of adjustment to long run equilibrium is 23.7 percent when any past deviation must be corrected in the present period. Based on the findings, it was recommended that government should ensure greater percentage of its spending goes to the capital expenditure while smaller percentage goes to the recurrent expenditure as this will help to prove adequate infrastructure that will help in stimulating economic growth. Government should also ensure that there is full and honest implementation of the annual budget. Government should equally ensure that ensure that public debts are strictly used for the purpose for which they are meant for. Keywords: Government expenditure, Government revenue, Government borrowing, Economic growth DOI: 10.7176/EJBM/12-12-04 Publication date: April 30 th 2020

Non-Oil Revenue and Economic Growth in Nigeria

This study examined the effect of non-oil revenue on economic growth in Nigeria. The four specific variables proxy for non-oil revenue are: Value Added Tax, Companies Income Tax, Personal Income Tax and Custom & Excise Duties, while Gross Domestic Product was used to represent economic growth in Nigeria. The study population consists of all individuals, corporation soles and corporate organisations whose taxes were paid to the Nigerian government except firms operating in the upstream industry. The study sample consists the entire population of study using the census sampling approach. The secondary source of data collection method was used in generating data from the Federal Inland Revenue Service Statistical bulletin of 2018 and the National Bureau of Statistics of 2019 for the period 1994-2018. The descriptive statistics and Ordinary Least Square (OLS) regression techniques were used to analysed the data collected. The study findings revealed that indirect taxes (Custom & Excise Duties and Value Added Tax) have more significant positive effect on the Nigerian economic growth than direct taxes (Companies Income Tax and Personal Income Tax). Also, direct taxes have significant but negative effect on the Nigerian economic growth, especially in the long run. It is therefore recommend that simple and transparent tax laws be enacted to regulate the tax regimes in Nigeria in order to avoid any form of illicit strategic tax behaviour by management. Also, the problems of implementation of good tax reforms policies should be eliminated. Tax authority should provide strategies to strengthen the control on the significant variables identified in this study analysis. Keywords: Tax revenue, economic growth, gross domestic product, direct tax, indirect tax. DOI: 10.7176/RJFA/11-8-10 Publication date: April 30 th 2020

Response of Banks to Fiscal Policy Stimuli in Nigeria

This study went into much neglected area of research; relationship between fiscal policy instruments and performance of banks in Nigeria. Various finametric tools were used to analyze data collected from Nigerian Deposit Insurance Cooperation and Central Bank of Nigeria for period of 1989 to 2018 inclusive. Resounding empirical findings were made as follows; Bank performance is autoregressive. That suggests that performance of banks in the past cannot be predicting future bank performance. It was conspicuously observed that Capital Expenditure, Non-Oil Revenue and Domestic Debt have positive and significant relationship with bank performance, while Recurrent Expenditure Domestic Debt afterwards negatively and significantly impact bank performance. It was also found that fiscal policy variables (Capital Expenditure, Recurrent Expenditure, Non-Oil Revenue and Domestic Debt) significantly impact bank performance both in the short run and long run. Since fiscal policy variables are found to exert significant impact banks’ performance in Nigeria, the researchers suggests to Federal government of Nigeria as a matter of urgency reconsiders the operation of Treasury Single Account. It is the view of the researchers that the Treasury Single Account be operated through deposit money banks by domesticating various Ministries, Departments and Agencies (MDAs) account with the deposit money banks. Keywords : Bank Performance, Fiscal Policy, ARDL, Nigeria. DOI: 10.7176/RJFA/11-8-12 Publication date: April 30 th 2020

A Systematic Review of the Factors Affecting the Growth of Medical Tourism in Iran

Introduction: Planning in the field of medical tourism is of particular importance. The main objective of this research was to identify and analyze the factors affecting the growth of medical tourism in Iran. It could be a small step toward promoting entrepreneurship and increasing non-oil revenues in the country. Methods: Studies published in the Persian and English language during the years 2006-2019 in Science Direct, ProQuest, Springer, Medline, Scopus, Ovid, and SID databases were reviewed, and the findings were then compared. Results: A total of 75 articles out of 2631 unique publications were included in this study. Most articles reported studies performed for all patients, including the whole country (Iran) (n=22, 30%), Shiraz only (n=11, 15%), Tehran only (n=11, 15%), Mashhad only (n=6, 8%), Isfahan only (n=5, 6%), and Ardabil only (n=4, 5%). Conclusion: Given the history of Iranian hospitals in attracting foreign patients and the analysis of their status, there are many limitations in achieving a proper standing in the medical tourism industry. Strategies offered by various managers and authorities in tourism can lead to increased attraction of medical tourists to public and private hospitals in Shiraz, relying on the capabilities and potential of Shiraz and its health sectors, including climate and nature, cultural and historical attractions, renowned practitioners, advanced equipment, facilities, and methods, and thereby generating more foreign exchange earnings and employment.

Foreign Financial Inflows and Poverty in Nigeria

This paper aims to study the effect of foreign financial inflows on poverty in Nigeria (1981-2015). The impetus for this study stems from the paradoxical observation that, although Nigeria is blessed with a high influx of foreign financial inflows (FFI), the country grieves from severe and lasting poverty. It is expected for every economy that there is existence of foreign financial inflows that the rate of poverty should be at its minimal level. The major objective of this research work is to examine how foreign financial inflows influences poverty in Nigeria. In the process of carrying out this research work, various variables such as inflation, gross domestic product, exchange rate, foreign direct investment, remittance, oil revenue and non-oil revenue were adopted. The data used in this research were secondary data obtained from the Central Bank of Nigeria Statistical Bulletin 2016 and World Development Indicators (WDI). The augmented dickey fuller test (ADF) for unit root test, Correlation analysis, Bound test and Autoregressive Distributed Lag Model (ARDL) were used in the estimation to this paper work. Findings were drawn from the research that foreign direct investment and oil revenue are significant to poverty reduction in Nigeria while the rest of the variables adopted were insignificant. Therefore, recommendation is suggested that the government should create a conducive environment for investors to be willing to invest so as to increase the foreign direct investment and also encourage the export of oil product in order to increase revenue from it.

Tax Revenue and Nigeria Economic Growth

This study examines the relationship between Tax Revenue and Nigeria Economic Growth. In order to achieve this objective, data was gathered through secondary means. Tax Revenue is proxy by Petroleum Profit Tax, Value Added Tax and Companies Income Tax, while Economic Growth is proxy by Gross Domestic Product. Data collected were analyzed with the aid of the Stata computer software. The study revealed that Petroleum Profit Tax (oil tax revenue) has a positive but no significant relationship with Nigeria Economic Growth, while Value Added Tax and Companies Income Tax (non-oil Tax Revenue) have significant relationship with Nigeria Economic Growth. The study recommends that government should minimize the wide spread corruption and leakages prevalent in tax administration in Nigeria, and transparently and judiciously account for tax revenue generated through the provision of more quality public goods and services, and need not to increase the rates of Value Added Tax and Companies Income Tax in the short run, but to closely monitor the operations of companies engaged in petroleum operations to minimize tax evasion, and as well as support the development of entrepreneurial activities in order to significantly increase Tax Revenue so as to sustain the significant relationship of VAT and CIT (non-oil tax) revenue with Nigeria Economic Growth.

Tax Revenue and Nigeria Economic Growth

This study examines the relationship between Tax Revenue and Nigeria Economic Growth. In order to achieve this objective, data was gathered through secondary means. Tax Revenue is proxy by Petroleum Profit Tax, Value Added Tax and Companies Income Tax, while Economic Growth is proxy by Gross Domestic Product. Data collected were analyzed with the aid of the Stata computer software. The study revealed that Petroleum Profit Tax (oil tax revenue) has a positive but no significant relationship with Nigeria Economic Growth, while Value Added Tax and Companies Income Tax (non-oil Tax Revenue) have significant relationship with Nigeria Economic Growth. The study recommends that government should minimize the wide spread corruption and leakages prevalent in tax administration in Nigeria, and transparently and judiciously account for tax revenue generated through the provision of more quality public goods and services, and need not to increase the rates of Value Added Tax and Companies Income Tax in the short run, but to closely monitor the operations of companies engaged in petroleum operations to minimize tax evasion, and as well as support the development of entrepreneurial activities in order to significantly increase Tax Revenue so as to sustain the significant relationship of VAT and CIT (non-oil tax) revenue with Nigeria Economic Growth.

Federally Collected Non-oil Tax Revenue and National Economic Performance in Nigeria: A Pre - post Treasury Single Account Implementation Assessment

This paper examined the implementation of Treasury Single Account (TSA) on federally collected non-oil tax revenue and national economic performance in Nigeria, via an inter-period comparative milieu. This study was stimulated by the divergent opinion amongst stakeholders on the justification and efficacy of the TSA model. The study was underpinned by the stakeholder and public finance management theories. Mulled after the ex post facto research template, before (pre) and after (post) implementation data of the corresponding periods were obtained from the annual bulletins/reports of Federal Inland Revenue Service (FIRS), Central Bank of Nigeria (CBN) and Nigerian Bureau of Statistics (FBS). While, actual reported tax revenue for the corresponding periods were obtained, gross domestic product was deployed to proxy national economic performance. Paired sample t-test was used to process the data on the Statistical Package for Social Sciences (SPSS) template. The results revealed that, in gross terms more revenue was collected pre-TSA. However, a significant increase in federally collected revenue post TSA implementation was achieved, granted that the economy slipped into recession from the third quarter of 2015, also a considerable growth in GDP. In essence, both measures performed better in the post implementation period from a comparative strand. This implies that, the TSA policy has a positive bearing on both non-oil tax revenue generation and economic performance. Following, it is recommended that government should improve on the existing TSA framework by incorporating complementary, supportive control and monitoring measures to perfect the operation of the system, and to escalate the system further towards monitoring outflows (expenditure),

Finance Act 2019 and Its Implications in Value Added Tax Administration in Nigeria

The emergence of Finance Act, 2019 shows that tax revenue collection has finally become a basic parameter for economic development in Nigeria. Ever since Nigeria started the production of crude oil in a commercial quantity in 1956, the economy has been significantly skewed to crude oil dependence with merely little or no efforts for its diversification. But following the recent global fall in crude oil price that has impacted negatively on the national economic development, it has become eminent to divert to other sources of revenue generation than oil and gas sector. This has necessitated the adoption of Finance Act, 2019 in budgeting system that is driven on non-oil tax revenue. This technical paper therefore, discusses Finance Act, 2019 and its implications in Value Added Tax Administration in Nigeria. The paper pinpoints the major amendments of Value Added Tax Act, Cap VI, LFN 2004 (as amended), as contained in the Finance Act, 2019 and highlights their underlining implications as well as provides further clarifications for appropriate implementation of the Act and its ease of administration. It is the assertion of this paper that, tax law on itself does not optimize tax revenue collection, but effective and efficient administration of tax law does. It is also the purport of the paper to enhance human capacity in harnessing the opportunities lying therein, which would in turn, optimize tax revenue collection and voluntary compliance that can make taxation the pivot of national development. The paper employs secondary model of data collection and recommends for speedy linkage of the tax identification number with the bank biometric verification number of each tax paying public to eliminate the high tendency of tax evasion scheme in Nigeria.

Capital Market and Fiscal Policy Shocks in Nigeria

This study dissected fiscal policy from monetary policy to unravel its impact on Capital market performance in Nigeria and how capital market responds to fiscal policy measures. The empirical analysis came up with the following major findings; the Error Correction Model revealed that market Capitalization as a performance index in this study is autoregressive, implying that previous market capitalization can predict investors’ perception of the market in the futures, also the model’s results show that recurrent expenditure and Non-Oil Revenue have negative and significant relationship with capital market performance in Nigeria. And Domestic debt was found to have a positive and significant relationship with capital market performance, validating the Keynes’s postulations reviewed in this study that government should adopt fiscal policy through deficit financing to put an end to further economic depression and related issues. Pairwise Granger Causality Test Results found bi-directional effect between domestic debt and market capitalization, implying that the duo drive each other or have feedback effect. Also VEC Granger Causality/Block Exogeneity Wald Test revealed that fiscal policy variables jointly cause capital market performance in the long run. The impulse responses revealed that shock market capitalization (own shock) exerted huge influence in the cause of variations on capital market performance followed by shocks from government expenditures. It is in light of the findings the researchers among others; advise the regulatory authorities in Nigeria that government revenues and expenditure be adequately orchestrated as main drivers to correct disequilibria in the Nigeria.

Sectorial Contributions of Non-Oil Revenue to Economic Growth in Nigeria

The study examined the sectorial contributions of non-oil revenue to economic growth in Nigeria from 1981 to 2018 with the aim of examining the effects of environmental, information and communication technology and financial sectors’ revenue to economic growth in Nigeria. Autoregressive distributed lag model was the main estimation technique applied. The time series data for the study on environmental sector revenue, information and communication technology sector revenue, financial sector revenue and real gross domestic product were secondarily sourced from the Central Bank of Nigeria’s Statistical Bulletin. The study found that environmental sector revenue has positive and insignificant contributions to economic growth whereas there information and communication technology and financial sectors’ revenue contributed positively and significantly to economic growth in Nigeria. The study, thus, implies that the sectorial contributions of non-oil revenue undermined. It is concluded that sectorial contributions of non-oil revenue is positive and significant to economic growth in Nigeria. Recommendations were made that, environmental, ICT, financial among others non-oil sectors should receive the same magnitude of fund as in the case of oil sector, i.e., the sector should be more funded and well equipped to ensure good outputs and contributions; government should review environmental factors and policy that may spur the economy significantly.

Tax revenue and private domestic investment: Evidence from Nigeria

This paper investigated the impact of tax revenue on private domestic investment in Nigeria from 1980 to 2018 using the modified ordinary least squares- Autoregressive distributed lag (ARDL). The paper used oil revenue, non-oil revenue, and Corporate Income Tax (CIT) as the independent variables while Private Domestic Investment (PDI) is the dependent variable. Oil revenue and non-oil revenue were used as a proxy for oil and non-oil tax. These data were obtained from secondary sources- central Bank of Nigeria, World Bank database and Federal Inland Revenue service statistical bulletin. The result showed that a long-run relationship exists between the aforementioned variables. Also, the paper revealed that oil and non-oil do not have a significant impact on PDI but CIT has a positive and significant impact on PDI. The paper recommends that proper measures/reforms should be put in place in order to reduce the impact of tax on private domestic investment in Nigeria.

Changes in Crude Oil Prices and the Flow of Government Revenue

This work is set out as an investigation into the impact of change in oil prices on government revenue broken into oil and nonoil component. Drawing data from the Central Bank Statistical Bulletin and covering the period 1981 to 2018. The Autoregressive Distributed Lag (ARDL) Model was used because of its advantages over other regression techniques. It was found that changes in oil price affected oil revenue within the studied period leaving no significant impact on nonoil revenue. The result obviously reflects the Nigerian economy and its mono-product characteristic. It is therefore recommended that a conscious policy effort should be made to diversify the economy in a manner that makes revenue to the government multifarious functions.

Tax revenue and private domestic investment

This paper investigated the impact of tax revenue on private domestic investment in Nigeria from 1980 to 2018 using the modified ordinary least squares- Autoregressive distributed lag (ARDL). The paper used oil revenue, non-oil revenue, and Corporate Income Tax (CIT) as the independent variables while Private Domestic Investment (PDI) is the dependent variable. Oil revenue and non-oil revenue were used as a proxy for oil and non-oil tax. These data were obtained from secondary sources- central Bank of Nigeria, World Bank database and Federal Inland Revenue service statistical bulletin. The result showed that a long-run relationship exists between the aforementioned variables. Also, the paper revealed that oil and non-oil do not have a significant impact on PDI but CIT has a positive and significant impact on PDI. The paper recommends that proper measures/reforms should be put in place in order to reduce the impact of tax on private domestic investment in Nigeria.

Estimating the underground economy, illegal money and tax evasion in Qatar

PurposeUp to now a country-specific study on Qatar with respect to underground economy, illegal money and tax evasion has not been undertaken. This paper aims to contribute by separately estimating the magnitude of the underground economy in Qatar from 1980 to 2010 using adjusted currency demand function.Design/methodology/approachThe study uses the Zivot–Andrews unit root test for the stationarity analysis and applies the Gregory and Hansen long run cointegrating technique for estimating the underground economy based on the latest form of the currency demand function model. While the general to specific technique is used to estimate the short run error correction model.FindingsThe results show that the average size of the underground economy in Qatar is about 17.03 per cent of the official gross domestic products (GDPs). The average level of tax evasion as a per cent of the total non-oil tax revenues is estimated at around 16.50 per cent and is about 2.12 per cent of the official GDP. The average level of illegal money to the total money from banking sector is estimated at 26.70 per cent.Originality/valueThis study is the first to separately estimate the extent of the underground economy, illegal currency and tax evasion in Qatar. It overcomes the methodological errors and spurious estimation problems encountered in the previous studies that included Qatar with other countries based on cross-country data without taking into consideration the economic differences between countries. The authors believe that the findings may help the government of Qatar to re-formulate its economic policies, thus, enabling it to curb the growing underground economic activities.