Gain tax, when such capital gains are generated by corporate entities. The study examined the impact of tax revenue on the nigerian economy. The study adopted a descriptive and historical research design. Tax revenue and economic development in nigeria citeseerx. Data and research on income taxes including oecd tax databases, taxing wages, revenue statistics, tax policy studies. Revenue allocation and economic development in nigeria. Time series data on the gross domestic product gdp, vat revenue, total tax revenue and total federal government revenue from 1994 to 2010 sourced from central bank of nigeria cbn were analyzed, using both simple regression analysis and.
It is important to note that the rebased gdp growth rates for 2011, 2012 and 20 were 17%, % and % respectively. Tax revenue is essential to accelerate the economic development basirat et al. Evaluate the effect of tax revenue on infant mortality im in nigeria. Crude oil export has continued to account for over 80% of the total federal government revenue, while the remaining 20% is contributed by nonoil. The empirical results confirm that there is a negative relationship between taxes and economic growth in south africa. Relevance of value added tax on infrastructural development in nigeria adereti, sanni and adesina 2011, uses time series data to study the effect of value added tax on the gross domestic product gdp. The study examined the relationship between tax revenue and economic growth in nigeria. The study period spans economic cycles for about 66 percent of the life of the country, since attaining political independence in 1960.
The study examined the effect of tax compliance on economic growth and development in nigeria. The contribution of taxation to any economy globally cannot be overemphasized. The economic development and growth of any nation depends on government ability to generate adequate revenue in order to effectively provide various infrastructural facilities to satisfy the needs of the population and takes its position among the nations in the global village. It aimed to give a detailed examination of the effect of tax avoidance on the economic growth and development in nigeria. Petroleum profit tax revenue from petroleum profit tax is the most significant source of revenue of the nigeria government, accounting for over 90% of its total foreign exchange earnings. The study employed annual time series data spanning the years 19812011. Effect of tax revenue on economic growth in nigeria iiard. Ofurum et al impact of etaxation on nigerias revenue and economic growth. The impact of tax policy on economic growth in nigeria.
Tax revenue generation and the economic development of. Tax compliance here is proxied in willingness of the citizens to pay tax. This work evaluates the effect of tax avoidance and tax evasion on economic growth and development in nigeria 20062016. The effect of tax compliance on economic growth and. Taxation and tax policy as government strategy tools for. This paper investigates the impact of taxation on economic growth in south africa. The objective of this study was to examine the significant difference between the effects of oil and non oil tax revenue on economic growth in nigeria. Nigeria government revenues 20102019 data 20202022. The manner in which the tax authorities will go about this revenue drive will have its effect, positive or negative, on the economy. Evaluating the impact of value added tax on the economic.
The share of social security contributions in total tax. The objective of this paper is to explore the impact of tax revenue on the economic development of ghana and the gross domestic product which measures economic development was used as a proxy. For this reason, the entire ownership and control of petroleum wherever it is found in nigeria is vested in the federal government. This is because tax revenue is an important instrument for economic growth and development in many developing economies like nigeria, since the internal revenue generated. Yakubu and jibril 20 investigated the relative impact of value added tax on economic growth in nigeria. Harelimana, 2018 there is a temporary impact on the tax policy exogenous model growth. A high tax rate would deter saving and development, while a lower tax rate would lead to less revenue to the state. Tax revenue mobilization as a source for financing development activities in nigeria has been a difficult issue primarily because of various forms of resistance, such as evasion, avoidance and other form of corrupt practices. World bank and pwc 2015 3 paying taxes survey in 2005 revealed that taxpayers are able to file tax returns electronically in about 45% of the countries. The main objective of this paper is to ascertain the impact of tax reforms on tax revenue generation in nigeria. International journal of development and economic sustainability vol.
Indeed the importance of public revenue from the point of view of accelerated economic development could hardly be exaggerated. Pdf pthe study examined the relationship between tax revenue and economic growth in nigeria. Taxation and tax policy as government strategy tools for economic development in nigeria oyewo babajide michael 1 1 school of business, department of accounting, covenant university, ogun state,nigeria abstract. The analysis of the effect of petroleum profit tax on. A tax directly influences the savings of individuals and companies. The administration of taxes in nigeria has also been focused on revenue generation to the detriment of. An emperical analysis of tax revenue and economic growth. For this reason, the entire ownership and control of petroleum wherever it is. Kaldor 2004 pointed out the importance of government revenue in accelerating economic development. Economic and fiscal implications of nigerias rebased gdp. An emperical analysis of tax revenue and economic growth in.
Ictd unuwider government revenue dataset, november 2017. Taxation, besides its revenue generation capacity, can also be used as a fiscal policy tool to shape the economy. The work therefore intends to examine whether cross sectional economic growth is enough a viable tax policy in nigeria. Company income tax and nigeria economic development. The objective of this study was to examine the significant difference between the effects of. The roles of value added tax in the economic growth of. This study examines the effect of tax revenue on economic growth in nigeria, utilizing time series data for the period spanning from 1970 to 2011. The impact of taxation as an aid to economic development includes abstract and chapter one, complete project material available the impact of taxation as an aid to economic development in edo statea case study of oredo local government area, edo state, nigeria proposalthe research work will discuss in detail the impact of taxation as an aid to economic development in edo state. The analysis of the study was carried out using the method of multiple regression analysis. This study examined the impact of etaxation on nigerias revenue and economic growth. Political and economic stability matters as well, but this finding is not robust across specifications. Tax revenue and economic development in nigeria international. Ekeocha 2010 however, made a simulation study advocating value added tax trade from 5 to 15%.
Impact of taxation revenue on economic growth of nigeria. The effects of tax revenue on economic growth in nigeria. Regional nonresource taxes 20002015 as percent of gdp6 source. Apart from the revenue function it performs for the government, it is also used to assist the national government to achieve the countrys macroeconomic objectives in the. Tax revenue and economic development in nigeria hrmars.
A disaggregated analysis, international journal of academic research in. The proxy for economic development for this study is real gross domestic product rgdp as used by jimoh 2003 and revenue allocation is proxied by revenue allocation to federal government, revenue allocation to the state governments, and revenue allocation to the local governments as used by emengini and anere 2010, and akeem 2011. Impact of etaxation on nigerias revenue and economic growth. Finally, we find that those countries that depend on taxing goods and services as their primary source of tax revenue, have relatively poor revenue performance. Empirical analysis of effect of tax revenue on economic development of nigeria grace n. The study period spans economic cycles for about 66 percent of the life of. Relevance of tax revenue resources to infrastructural. The roles of value added tax in the economic growth of nigeria. The study focuses on the impact of petroleum profit tax, company income tax, personal income tax, value added tax revenue on nigerias economic growth between 1980 and 20. To improve the tax revenue to gdp ratio, tax collection must grow faster than gdp. He argued that an increase in the rate of value added tax will affect the countrys revenue base. Economic development in nigeria, although has been rocked back and forth by various political, sociocultural, financial and infrastructural setbacks, the economic development of a country like nigeria cant be said to have totally been where it used to be, or to have back tracked as some people insinuate.
The main objective of the study is to investigate the impact of taxation revenue on nigeria economic growth. Conceptual background tax revenue mobilization as a source for financing development activities in nigeria has been a. Whatever the prevailing ideology or political situation of a particular country, it must steadily expand a host of nonrevenue yielding services such as education, health, infrastructure, and social security. The share of social security contributions in total tax revenue was highest in tunisia 30. In order to justify this dichotomy, an attempt is made in this paper, taking nigerian economy as a case study, to address the economic effects of both low and high tax policy regimes on economic growth with the main objective of examining the economic impact. For the five other countries botswana, equatorial guinea, eswatini, nigeria and south africa, taxes on income and profits accounted for the principal share of total tax revenue. The study further revealed rise and fall in tax revenue and economic development occasioned by corruption, tax evasion, 2008 economic meltdown, dysfunctionalities in the income tax system, and. Specifically, an attempt will be made to verify the relationship between federally collected revenue and specific tax revenue generation sources. The result indicated a unidirectional causality between tax revenue and economic growth and it flows from tax revenue to economic.
The paper also examines tax reforms and the effect of automation on tax revenue performance, sources of revenue leakages and measures to improve the. Tax revenue generation and the economic development of ghana. Impact of etaxation on nigerias revenue and economic. Mar 27, 2016 for taxation to make the desired impact on the economic development of nigeria as the major source of government revenue. Determinants of tax revenue efforts in developing countries. Personal income tax pit and economic growth in nigeria. The study recommends to boost economic growth in nigeria, government should ensure the tax revenue generated are channeled towards building capital stock. Impact of taxation revenue on economic growth of nigeria with references. The effects of tax revenue on economic growth in nigeria1970. For taxation to make the desired impact on the economic development of nigeria as the major source of government revenue. Given that the purpose of introducing electronic tax system is to improve revenue collection which will in turn improve the countrys economic growth, the study empirically examined how the implementation of etaxation in 2015 has affected tax revenue, federally collected revenue and taxtogdp ratio. Pdf government tax revenue and economic development in. Yearly data for south africa for the period 1981 2016 was used to develop the autoregressive distribution lag ardl approach.
Pdf tax revenue and economic growth in nigeria researchgate. This study examines the effect of tax revenue on economic growth in ghana using quarterly data for the period 1986 to 2010 within the var framework. Assessment of value added tax on the growth and development. Total tax revenue and total federal government revenue from 1 %4 to 2008. However, one means of generating the amount of revenue for providing the needed infrastructure is through a well structured. The choice of the study period provides an opportunity for. The impact of taxation on economic growth in south africa. Pdf this study is on government tax revenue and economic development in nigeria.
May 02, 2015 the study examined the effect of tax compliance on economic growth and development in nigeria. The general objective of this study is to examine the impacts of value added tax on revenue generation in nigeria. Data were sourced from central bank statistical bulletin and extracted through desk. Tax revenue and economic growth in nigeria olufemi. Akwu2 oliver o3 1,2,3department of accountancy, university of nigeria enugu campus enugu, enugu state nigeria abstract the purpose of this study is to examine the effect of tax revenue on the economic development of nigerian, and to. Taxation and tax policy as government strategy tools for economic development in nigeria oyewo babajide michael 1 1 school of business, department of accounting, covenant university, ogun state, nigeria abstract. Aug 26, 2017 the economic development and growth of any nation depends on government ability to generate adequate revenue in order to effectively provide various infrastructural facilities to satisfy the needs of the population and takes its position among the nations in the global village. The impact of taxation as an aid to economic development includes abstract and chapter one, complete project material available the impact of taxation as an aid to economic development in edo statea case study of oredo local government area, edo state, nigeriaproposalthe research work will discuss in detail the impact of taxation as an aid to. However, one means of generating the amount of revenue for providing the needed infrastructure is through a well. Nicholas kaldor, taxation for economic development, journal of modern african studies, 1963, p. This act regulates the personal income tax throughout the federation.
Identify the effect of tax revenue on labour force lf in nigeria. Yearly time series data of personal income tax and the gross domestic product gdp were obtained from the federal inland. The broad objective of this study is to ascertain the effect of tax revenue on economic development in nigeria. The study found that there exist both short run and long run relationship between economic growth and tax revenue. Value added tax and economic development in nigeria. This study was designed to investigate the tax revenue and nigerian economic growth for period of three decade, using time series data from 1986 to 2015. The nigerian perspective is because the bulk of revenue needed for development purposes is derived from oil.
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