Tax Revenue In Nigeria Research Articles

Causal Relationship Between Economic Growth and Government Tax Revenue: A Case of Nigeria (1970-2021)

This paper aims at elucidating the mystery surrounding the belief that, high and vibrant economic activities and economic growth are a prima-facie and a leading indicator for high tax revenue as a source of income for the Federal government in Nigeria. The effects of economic growth on government tax revenue are therefore empirically investigated from 1970-2021. The short-run and long-run relationships between the economic growth in Nigeria and its tax revenue are thus explored in this study. Although, theoretical and empirical reports found that there is a causal relationship between economic growth and tax revenue; this study thus further investigated this relationship by applying Johansen's cointegration test, autoregressive distributed lag (ARDL), and Vector Error Correction Model (VECM) to establish the short and long-run relationships that may exist between economic growth and government tax revenue. However, the findings of this study clearly showed that there is an independent relationship between economic growth and government tax revenue with a 76% speed of adjustment. Thus, there is a unidirectional relationship between economic growth and total government tax revenue with a 74.76% speed of adjustment in the short run to reach an equilibrium level in the long run. This implies that there is fiscal independence between economic growth and tax revenue. The empirical analysis also provides evidence of a long-run equilibrium relationship. Based on the findings that GDP, exchange rate, and production capacity strongly and positively affect the performance of tax revenue in Nigeria. The study recommends among others that appropriate fiscal policies be put in place to moderate the fluctuations in exchange rates of the Naira against other foreign currencies and that the government should support innovative activities by youths through the creation of innovative labs. This would help to create more job opportunities for the youths and also encourage public and private partnerships between the state governments and private investors to improve the economic activities of the country, which will in turn bring about increased tax revenue. Keywords: Economic Growth, Tax Revenue, Tax Policy, GDP,

Self-Assessment Regime, Tax Compliance, And Tax Administration: Evidence From Emerging Economy

Purpose: This study examined the effect of self-assessment regime and tax compliance on tax administration in Nigeria. The specific objective was to find out the effect fiscal governance quality tax-payers knowledge (TKW), filling of tax returns (FTR), financial constraints (FCT), ability to pay tax without being compelled (PAC).
 Methodology/approach: The study adopted the survey research design This is because the objective of the study is to systematically obtain information to describe how self-assessment endues tax compliance and tax administration. The population of this study is the 96 conventional Federal Inland Revenue Tax offices and all corporate taxpayers in Nigeria. The study utilized the purposive sampling technique considering responses from our respondents, fifteen conventional federal inland revenue tax offices and twenty-five corporate taxpayers were chosen for the study. One hundred and two respondents out of which forty-five were from conventional Federal Inland revenue tax office and fifty-seven responses from corporate taxpayers. The source of data is primary and five-point Likert scale questionnaires were designed to generate responses from respondents. Out of a total number of 750 questionnaires sent out through Google, only 252 were returned. The study made use of inferential and descriptive statistics to analyze the responses with the aid of SPSS.
 Findings: The finding indicated that there is a significant association between tax knowledge and ability to pay tax without being forced and governance quality, but filling of tax return and financial constraint have negative effect on governance quality. The study concluded that the association between self-assessment regime and tax compliance and tax administration in Nigeria is significant and the study recommended that loopholes from where tax revenue is lost should be covered to increase tax revenue in Nigeria.
 Practical Implication: The research finding has an effect on tax policy makers and taxpayers in Nigeria
 Originality/Value: this study is having modified the existing variables used by previous and introduced new ones as it introduced financial constraint and ability to pay tax as a measure of tax compliance.

Effects of the Macroeconomic Environment, Policy and Administrative Measures on Revenue Performance: The Case of Nigeria (2010–2021)

This study examines the impact of specific macroeconomic variables on tax revenue performance in Nigeria. Utilising quarterly time series data from 2010 to 2021, sourced from various secondary references, the study employs a variance inflation factor (VIF) test to check for multicollinearity. The analysis is conducted using a multiple regression model. The findings indicate that the gross domestic product (GDP) has an insignificant positive effect on tax revenue in Nigeria. Conversely, the inflation rate and employment negatively affect tax revenue generation, although the influence of unemployment on tax revenue is statistically insignificant. The f-statistic value of the model confirms that the combination of the variables studied significantly impacts tax revenue. Therefore, the study concludes that macroeconomic variables are crucial determinants of tax revenue generation in Nigeria. It recommends that the Nigerian Revenue Authority should take measures to strengthen the relationship between GDP and tax revenue.

Tax collection efficiency and tax revenue generation in Nigeria

When compared to other African countries, Nigeria has one of the lowest tax to GDP ratios among the top ten largest countries in Africa. Hence, this study assessed the effect of tax collection efficiency on the level of tax revenue in Nigeria. The study is built theoretically on the cost-benefit theory of taxation. Secondary data was collected in this study over an eleven-year time period which range over 2011 to 2021. The data were processed analytically using the regression model to measure the effect of the independent variable which is tax cost of collection efficiency on the dependent variables which are direct cost and indirect taxes and moderated by accountability of the collecting agency. The outcome of the study shows the regression result of 74.3% and a calculated p-value of 0.002 which shows that tax collection cost efficiency have a high level of significance effect on direct tax revenue generation in Nigeria. It is concluded from the result that tax collection cost efficiency does have a significant effect on tax revenue generation in Nigeria. Based on the outcome of the study, it is advised that more prudent measures be set up so as to ensure improvement in the tax collection process in order to manage tax collection cost efficiently and improve tax revenue generation in Nigeria.

Tax Registration and Tax Revenue Generation in Nigeria: Account of Allingham and Sandmo Theory

This research examines the effect of tax registration of micro, small medium enterprises, corporates and individuals on tax revenue generation in Nigeria. The study adopted a descriptive and historical research design; secondary data for nineteen years (2003 - 2022) were collected from various issues of the Central Bank of Nigeria (CBN) statistical bulletin and annual reports. Tax revenue generation as a dependent variable was measured with actual annual total tax revenue. The data was analyzed using multiple regression analysis to establish the relationship between the dependent and independent variables. Durbin Watson test carried out and multicollinearity test using the VIF factor. All the variables have positive influence on actual annual total tax revenue in Nigeria (AATR). The beta values provide a measure of contribution of each variable. Higher beta value indicate greater influence of independent variable on the dependent variable. According to that, number of Corporate Registered Tax Payers (CRTP) (?=.391))has higher influence on actual annual total tax revenue in Nigeria (AATR) which is followed by number of Enterprise Registered Tax Payers (ERTP) (?=.323), and number of Individual Registered Tax Payers (IRTP). (?=.187) From the study, we examined that, tax registration proxied by number of registered corporate, enterprise and individual taxpayers are significant to tax revenue generation in Nigeria. The results are useful for both tax authorities and taxpayers in order to resolve the problems associated with tax compliance and also to boost tax revenue generation in Nigeria.

Tax Compliance (Active Tax Payers) and Non-Oil Tax Revenue in Nigeria: Exposition of Fiscal Exchange Theory and Expectation Proposition

The paper investigated the tax compliance (active tax payers) and non oil revenue in Nigeria in relation to fiscal exchange theory and expectation proposition. The study adopted ex post facto research design; secondary data for nineteen years (2003 - 2022) were collected from various issues of the Federal Inland Revenue Services (FIRS) statistical bulletin and annual reports. Tax compliances as regressand variable was measured with number of actual annual total non oil tax revenue in Nigeria and Tax compliances among active tax payers of company income tax (CIT), Petroleum profit tax (PPT), Capital gain tax (CGT), Value Added Tax (VAT) and Personal Income Tax (PIT) as regressors. The data was analyzed using multiple regression analysis to establish the relationship between the dependent and independent variables. The findings revealed that tax compliance have significant effect on boosting tax revenue generation and that tax default can cause significant variation in government revenue. The variable in the model is significant at the 5% critical level and the regression coefficient reveals that 72.8% of the total variation in revenue is accounted for by tax compliance with other variables in the stochastic term accounting for the remaining 27.2%. Specifically, Tax Compliance (Active Tax Payers) is significantly and positively related to Active Tax Payers on Value Added Tax (ATVAT) (1.827925 ), Active Tax Payers on Company Income Tax (ATCIT) (2.84599) and Active Tax Payers on Petroleum Profit Tax (ATPPT) (2.286043 ), while Tax Compliance (Active Tax Payers) is negatively and insignificantly correlated with Active Tax Payers on Personal Income Tax (ATPIT)( -0.236908 ) Active Tax Payers on Capital Gain Tax (ATCGT)( - 0.236908 ) . It is recommended that Federal Inland Revenue Service should open more offices across the federation to increase the ease of paying taxes, set performance targets for managers of tax offices and sanction for non-performance.

Digitalization and Effective Tax Administration in Nigeria

The fourth industrial revolution of the developing nations seem to be anchored on digitalization of processes, hence the need to ensure effective methods of collecting government revenue to ensure maximum provision of goods and services for the citizenry. This study examined the imperativeness of digitalization in tax administration in Nigeria. The study employed quantitative research method and ex-post facto research design. The study covered a period from 2010 to 2021 which sums up to twelve years. Data on the independent variable, being digitalization (proxy by ICT) was sourced from secondary materials and was analysed with linear regression linking it to the dependent variable (proxy by tax revenue and tax evasion). The result of the analysis reveals the adjusted R square as -0.028 and a computed p-value of 0.406 which indicates that ICT has no significant low adverse effect on tax revenue in Nigeria. It also reveals the adjusted R square of 0.38 and the computed pvalue of 0.061 in respect of the second hypothesis which indicates that ICT has no significant low positive effect on the level of tax evasion in Nigeria. It is therefore concluded that digital economy does not have a significant effect on tax administration in Nigeria. It is recommended from the study that laws and processes be set in place to ensure that the tax authorities across all levels in the state are not left behind in the transition to the digital economy.

Tax Audit and Tax Revenue: An Empirical Study of Federal Inland Revenue Service

This study examined audit tax and tax revenue in Nigeria by means of a causal study design on a population twenty six (26) Federal Inland Revenue Service (FIRS), field offices in south south geographical location of Nigeria. Questionnaire was distributed to three (3) management staff from each of the 26 FIRS field offices in south south Nigeria, given a total of 78 respondents that constitutes the respondents of the study. Data for analysis was collected through primary and secondary sources. Primary data was collected through questionnaire to respondents, while secondary data was collected from FIRS Planning, Research and Statistics Department, Central Bank of Nigeria (CBN) statistical bulletin, articles, magazines and other published studies for the period covering 2007-2019. A total of 78 copies of the questionnaire were produced and distributed, of which 73 copies (93.59%) were successfully retrieved. However, out of the 73 copies that were returned only 67 copies (85.90%) were valid and used for the analysis. The simple linear regression was used for analysis. The results revealed that, tax audit statistically and significantly has effect on petroleum profit tax, company’s income tax and value added tax. The study therefore concludes that, tax audit has positive significant effect on tax revenue in Federal Inland Revenue Service of Nigeria, and recommends that the Federal Inland Revenue Service should encourage, strengthen and give more attention to the tax audit department, focus more on the audit activities of the service. This will deter taxpayer’s against non-compliance and discourage tax evasion

Moderating Role of Information Technology on the Relationship between Tax Compliance and Tax Revenue: An Empirical Study of Federal Inland Revenue Service

This study investigated the moderating effect of information technology on the relationship between tax compliance and tax revenue in Nigeria by means of a causal study design on a population twenty six (26) Federal Inland Revenue Service (FIRS), field offices in south south geographical location of Nigeria. Questionnaire was distributed to three (3) management staff from each of the 26 FIRS field offices in south south Nigeria, given a total of 78 respondents that constitutes the respondents of the study. Data for analysis was collected through primary and secondary sources. Primary data was collected through questionnaire to respondents, while secondary data was collected from FIRS Planning, Research and Statistics Department, Central Bank of Nigeria (CBN) statistical bulletin, articles, magazines and other published studies for the period covering 2007-2019. A total of 78 copies of the questionnaire were produced and distributed, of which 73 copies (93.59%) were successfully retrieved. However, out of the 73 copies that were returned only 67 copies (85.90%) were valid and used for the analysis. The simple linear regression was used for analysis. The results proved that, information technology statistically and significantly significant moderates the relationship between tax compliance and tax revenue. The study therefore concludes that,information technology positively and significantly moderates the relationship between tax compliance and tax revenue of Federal Inland Revenue Service, and recommends that federal Inland Revenue Service should encourage the use of ICT by procuring quality and relevant electronic gadget in all zonal/field offices especially in the south south to facilitate tax compliance and tax revenue generation.

Impact of Trade Openness on Tax Revenue in Nigeria

Impact of Trade Openness on Tax Revenue in Nigeria

INFLUENCE OF INSTITUTIONAL QUALITY ON TAX FRAUD MANAGEMENT IN SOUTH WEST NIGERIA STATE

Tax revenue is to be the surest way for the government to finance its budget but institutional deficiency is one of the factors militating against effective tax revenue in Nigeria. This study examined the influence of institutional quality on tax fraud management in South West Nigeria. This study used a quantitative method of data collection with a population of 504,263; the sample size was 400. The inferential statistics of the Partial Least Square Structural Equation Model (PLS-SEM) were used to analyze the data collected. The result of the finding indicated that in the context of control of corruption (β = -0.817, t = -22.043, p=0.000 < 0.05), rules of law (β = -0.116, t = -2.392, p=0.000 < 0.05) and quality of regulatory (β = -0.204, t = -2.169, p =0.043 < 0.05); there was a significant negative relationship between the variables of interest (control of corruption, rule of law and quality of regulatory) and tax fraud management in South West Nigeria. This study concluded that control of corruption, rule of law, and quality of tax regulation by the government reduce the tendency by which taxpayers will engage in tax fraud in South West Nigeria. It is also concluded that the taxpayers’ low rating on control of corruption and adherence to the rule of tax laws by the government and its agency contributed to the high rate of tax fraud among the taxpayers in South West Nigeria. This study, therefore, recommended that government live up to the expectation of taxpayers to block corruption, enhance adherence to the rule of law and maintain the high quality of tax regulatory agencies (FIRS) for better performance of tax revenue generation.

Inflation Rate and Tax Revenue Performance: A Time Series Assessment of Nigeria’s Four Decades Experience

There have been hyper inflationary trends in Nigeria going side by side with efforts of government to jack up its revenue generation. The broad objective of this study is to investigate the relationship between inflation rate and tax revenue in Nigeria in the past four decades. The study adopted a quantitative approach to the analysis of the impact of inflation on tax revenue performance in Nigeria using time series secondary data on Tax revenues, inflation rate, Foreign Direct Investment and Real Exchange, generated between 1981 and 2022, from the National Bureau of Statistics (NBS) and the Central Bank of Nigeria. Descriptive Statistics and Linear regression was carried out to establish the relationship between Inflation and tax revenue. The regression output was obtained using STATA, which is commonly used for time series data. The Laffer Curve Theory, which explains the theoretical relationship between the tax rate and government revenue obtained via taxing provided the theoretical framework on which the findings of this study leans on. The results of the study showed that there is a significant and positive relationship between inflation and Company Income Tax (CIT) in Nigeria; and between inflation and Petroleum Profit Tax (PPT) in Nigeria. However, the results of the study showed no significant relationship between inflation and Value-Added Tax (VAT) in Nigeria. From the findings, the study recommends that policymakers and tax authorities should take into consideration the impact of inflation when designing and implementing tax policies on CIT and PPT. Also, the lack of significant relationship between inflation and VAT suggests that policymakers and tax authorities should focus on other factors that affect VAT such as the level of economic activity, tax administration, and tax incentives.

Financial inclusion and tax revenue in Nigeria

Tax to GDP ratio in Nigeria is low when compared to her contemporaries in Africa. While financial inclusion tries to widen the participants in the formal financial system. Hence, this study was designed to examine the effect of financial inclusion on tax revenue in Nigeria. The study employed the ex-post facto research design and secondary data was gathered over a timeframe spanning from 2010 to 2019. The data was analyzed using the multiple regression and the result revealed that Automated Teller Machine and Mobile pay have an inverse effect (-0.174, -2.166) on the level of direct tax revenue in Nigeria while Point of Sale (POS) and Web pay have a positive effect (3.454 and 1.564) on the level of direct tax revenue in Nigeria. On the other hand, the result showed that POS has an inverse effect on the level of indirect tax revenue in Nigeria. Based on the results, it was concluded from the study that financial inclusion has a significant effect on the level of tax revenue in Nigeria. It was recommended that revenue authorities in Nigeria should collaborate with the existing financial institutions in promoting financial inclusion in Nigeria.

Effects of Online System of Taxation on Economic Growth in Nigeria (2005–2020)

This study carried out an empirical analysis of the effect of the online system of taxation on economic growth in Nigeria covering the period of 2005–2020. Data for the research was extracted from the Central Bank of Nigeria (CBN) Statistical Bulletin (2020). The multiple regression with the application of Ordinary Least Square (OLS) technique was employed in obtaining the numerical estimates of the coefficient in different equations (Pre-Online and Post-Online Tax Regimes). The One-Sample Test was employed to estimate the difference between pre-online and post-online taxation systems on economic growth in Nigeria. The major findings of the study revealed that pre-online tax revenue has a negative and non-significant effect on economic growth in Nigeria, post-online tax revenue has a positive and significant effect on economic growth in Nigeria, and there is significant difference between pre- and post-online tax revenue in Nigeria. It is the recommendation of the study that there should be stringent penalties imposed on any individual or corporate body who indulges in any form of tax malpractices, irrespective of states. If the positive impact of tax revenue on economic growth should be maintained, then the online tax system should be constantly reviewed so as to address emerging problems and to evolve with the changing economic landscape and increased complexity of today’s business environment.

Impact of some Macroeconomic Variables on Tax Revenue in Nigeria

The knowledge of the relationship between tax revenue and the interplay of macroeconomic factors is necessary to maximize the gains of the proposed elimination of non-tariff barriers by the African Union. This study was carried out to investigate the impact of trade liberalization and six macroeconomic variables on tax revenue in Nigeria from 1981-2019, using the autoregressive distributed lag (ARDL) approach to cointegration and the Error Correction Model (ECM). The unrestricted error-correction model was specified in the study by modifying ARDL model. Total tax and domestic tax revenues were predicted by trade liberalization and most macroeconomic variables examined. A unit increase in trade liberalization triggered an increase of 3% in both total and domestic tax revenues when all other variables in the model were held constant. The results of ECM showed that short run and long run equilibrium were present in the system. The macroeconomic variables found to be predictors of both domestic and external tax revenues are share of petroleum and mining in GDP, foreign direct investment, share of agriculture in GDP, per capita income, exchange rate and inflation rate. These are therefore important to explain tax revenue in Nigeria. The key policy recommendation for improved and sustained tax revenue is to embark on comprehensive trade liberalization policies as well as regulate changes in macroeconomic variables.

Tax Administration and Generation of Tax Revenue in Nigeria

Tax Administration and Generation of Tax Revenue in Nigeria

Spatial variability of the predictors of government tax revenue in Nigeria

Spatial variability of the predictors of government tax revenue in Nigeria

Governance Quality and Tax Revenue Mobilization in Nigeria

Abstract An evaluation of the quality of governance as a major determinant of tax revenue generation is important to both the government and the Nigerian public. It has become required as a result of many rising economies’ reliance on several taxes to raise income. Tax income generation is crucial to the fulfillment of the Sustainable Development Goals (SDGs) and rising economies’ economic progress. This study addresses the influence of both political (political stability), institutional (corruption) and bad governance on the mobilization of tax revenue in Nigeria. To serve this purpose, the study employed a time series data set from 2000 to 2020. After subjecting the data to the unit root test, the study further employs Ordinary Least Square (OLS). The findings revealed that corruption and political instability have a positive and significant impact on Nigeria’s tax revenue mobilization. Bad governance, on the other hand, has a positive and insignificant influence on Nigeria’s tax revenue mobilization. The study focuses on improving governance quality by lowering corruption rates and increasing transparency in tax administration. To accomplish so, countries must execute policy reforms such as establishing an effective and strict judicial system, offering monetary incentives for tax officers to lower the risk of corruption, and, most crucially, broadening the revenue base rather than raising tax rates. As a result, the tax administration will improve, and the economy’s overall tax revenue collection will improve.

The Impact of Trade Openness on Trade and Tax Revenues in Nigeria (1981-2018)

The challenge to provide enough resources to fund infrastructure development has been the bane of most developing countries like Nigeria. The appropriate economic and trade policies to deploy to increase revenue generating capacity of the government become compelling. This study examined the impact of trade openness on trade and tax revenue in Nigeria between 1981 and 2018. The study employed Augmented Dickey Fuller and Phillip Peron tests to conduct the stationarity tests. Akaike Information Criterion and Final Predictor Error provided the best lag lengths. Johansen cointegration test was used to determine the long run relationship. The study employed Vector Error Correction Model for the regression analysis while T- test and F test were also done to confirm the statistical significance of the variables and the models. For autocorrelation problem, Breusch-Godfrey serial correlation LM test were conducted and other post- estimation tests were also used. The result of the study showed that trade openness was negatively related with total tax revenue and with trade tax revenue (CED). The results indicate that a unit increase in trade openness leads to 11.58% decrease in trade revenue from CED and 13.69% decrease in total revenue. Trade openness as a policy to increase tax revenue was not beneficial to the country. Trade openness should be adopted with manufacturing and productive sector orientation in mind. In addition, tariff rates should be reviewed, and the tax structure should be transparent, and judicious use of tax resources should be implemented by government.

The Woebegone State of Companies Income Tax in Nigeria: Evidence from Widespread Tax Avoidance by Profitable Listed Companies

Profitable companies are expected to pay a 30% companies income tax on their profits earned in Nigeria. However, many companies in Nigeria pay far less due to their application of tax avoidance strategies. This paper report how profitable companies in Nigeria are able to successfully employed the loopholes in the Nigerian tax system to significantly lower their effective tax rate over the past five years. The paper examines 68 companies that are consistently profitable in each of the five years between 2014 and 2018, excluding companies that experienced even one unprofitable year during this period. From the analysis, this paper finds that as a group, the 68 companies examined paid an effective companies income tax rate of only 16.45% over the five-year period - far less than the statutory 30% companies’ income tax rate. Based on the evidence, this paper advocate for a strong alternative minimum tax that can do the job it was originally designed to do thereby bring about transparency, equity and fairness in tax payment in Nigeria. This paper adds new knowledge to the understanding of the state of tax avoidance in Nigeria. Finally, identifying firms’ aggressive tax planning strategies will close the tax loopholes and boosting tax revenue in Nigeria.