Effect of Tax Revenue on Economic Growth of Nigeria (1990-2020)

Abstract

The study examined the “Effect of Tax Revenue on Economic Growth of Nigeria Between 1990-2020”. The objective was to evaluate the effect of petroleum profit tax on the real gross domestic product of Nigeria; examine the impact of company income tax on the real gross domestic product of Nigeria; determine the impact of value added tax on the real gross domestic product of Nigeria. The study adopted ex-post facto research design. This study made use of secondary data obtained from the Central Bank of Nigeria Statistical Bulletins for the relevant years between 1990 and 2020. Data collected were analysed using Regression Statistical Tool using E-views Software Version 9. Findings revealed that Petroleum profit tax has significant effect on the gross domestic product of Nigeria; company income tax has significant effect on the gross domestic product of Nigeria; and valued added tax has significant effect on the gross domestic product of Nigeria. It was concluded that tax revenue from petroleum profits, company income tax and value added tax had significant positive relationships with Economic Growth of Nigeria. Based on the findings, it was recommended that: given the dwindling revenue from petroleum related sources, the government should embark on the strategic pursuit of broadening the economy to enhance economic growth and development; government agencies should effectively devise procedures for the collection of company income tax as it contributes to economic growth as reported in the findings; and government agencies should as well ensure timely payment of value added tax as it also contributed positively to economic growth as reported in the findings of the study.