Tax Revenue and Economic Growth in Nigeria: A Theoretical and Empirical Review
Alexander Olawumi Dabor *
Department of Accounting, Faculty of Arts, Management and Social Sciences, Edo State University Uzairue-Edo State, Nigeria.
ONAJI Abraham Adamu
Department of Accounting, Nile University of Nigeria, Nigeria.
Ogujiofor Magnus Nkemjika
Department of Accounting, Novena University Ogume, Delta State, Nigeria.
*Author to whom correspondence should be addressed.
Abstract
The main objective of this study is to examine the effect of tax revenue on economic growth in Nigeria. This study covers a period of 27 years (1995-2022). The reason for choosing this period is that it depicted the period in which value added tax (VAT) one of components indirect was introduced by the Nigerian government. Vector error correction modelwas employed to ascertain the relationship between dependent and independent variables. The results showed that first; there is a negative significant relationship between company income tax (CIT) and economic growth in Nigeria in both long and short run. The result also revealed that there is a significant negative relationship between custom excise duty and economic growth. On the contrary the results revealed that there is a positive and significant relationship between value added tax (VAT) and economic growth in both long run and short run.Based on the result the study recommends, government should close every leakage that may lead to drainage of taxes.
Keywords: Company income tax, economic growth value added tax