Does Tax Revenue Enhance Economic Growth in Nigeria?
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Abstract
This aim of this study is to examine the effects of tax revenue on the economic growth of Nigeria with the utilization of time series data for the time frame of 24 years (1998-2021) both years inclusive. The study’s specific goal is to evaluate the influence of petroleum profit tax, company income tax, custom and excise duty, value added tax and educational tax on economic growth in Nigeria. The study employed secondary data which have been sourced from Central Bank of Nigerian statistical bulletin and published Federal Inland Revenue Statement. Ex-post facto and correlational research design was used for this study. Additionally, the study utilized fixed effects regression model to analyze petroleum profit tax, company income tax, custom and excise duty, value added tax and education tax on gross domestic product (economic growth). The findings revealed that petroleum profit tax, custom and excise duty, value added tax and education tax has a statistically positive and significant effect on gross domestic product (economic growth) in Nigeria. It also reveals that company income tax has a negative and significant effect on gross domestic product (economic growth) in Nigeria. Based on these findings, the inquiry suggests that seminars, trainings, periodic sensitizations and workshops should be organized by the relevant tax agencies to the general public in Nigeria and corporate entities on the importance and significant benefits of tax revenue to the nation. The tax authorities should also venture to support companies to pay tax in other to enhance the growth of Nigerian economy.
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