This study assesses the contributions of agriculture, oil and nonoil tax revenue to economic expansion in nigeria using data that cover a period from 1981 to 2017. Tax revenue and economic development in nigeria international. International academic journal of economics and finance, 1 5. The impact of tax accounting on economic development of nigeria. The implementation of etaxation has significant tax compliance process. Value added tax and economic growth in nigeria john chika. This paper investigates the impact of taxation on econo mic growth in south africa. 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 study period spans economic cycles for about 66 percent of the life of. Ofurum et al impact of etaxation on nige rias revenue and economic growth. Effect of value added tax, customs and excise duties on. Harelimana, 2018 there is a temporary impact on the tax policy exogenous model growth. In six of the eight african countries these shares ranged between % and 18%. Evaluate the effect of tax revenue on infant mortality im 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. 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. Results show that agricultural revenue, manufacturing revenue and interest rate have significant impact on economic growth in nigeria. The impact of tax policy on economic growth in nigeria. Empirical analysis of effect of tax revenue on economic development of nigeria grace n. Impact of tax administration on government revenue in a.
The roles of value added tax in the economic growth of 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. To examine the relationship between value added tax and revenue generation in nigeria to establish the effects of value added tax on revenue generation in nigeria 1. An emperical analysis of tax revenue and economic growth in. To identify the factors or problems militating against the tax assessment and collection in nigeria. Tax revenue is defined as the revenues collected from taxes on income and profits, social security contributions, taxes levied on goods and services, payroll taxes, taxes on the ownership and transfer of property, and other taxes. Government tax revenue and economic development in nigeria. The impact of taxation on revenue generation in nigeria.
Total tax revenue as a percentage of gdp indicates the share of a countrys output that is collected by the. The effect of tax compliance on economic growth and. Nnamdi azikiwe university journal of international law and. Revenue allocation and economic development in nigeria. The general objective of this study is to examine the impacts of value added tax on revenue generation in nigeria. To identify possible effects of the tax evasion and avoidance on the economic development of the country and abia state in particular. Nigeria is richly blessed with oil and gas among other mineral resources, but the over dependence on oil revenue for the economic development of the country has left much to be deserved. Impact of taxation revenue on economic growth of nigeria. To observe the growth pattern of vat revenue and gdp 2. However, one means of generating the amount of revenue for providing the needed infrastructure is through a well structured.
Get free research paper on impact of company income tax revenue on the developing economy. Revenue generation is the nucleus and the path to modern development. The share of social security contributions in total tax revenue was highest in tunisia 30. Yearly data for south africa for the period 1981 2016 was used to develop the autoregressive distribution lag ardl approach. Mar 27, 2016 for taxation to make the desired impact on the economic development of nigeria as the major source of government revenue. The study adopted a descriptive and historical research design. Yakubu and jibril 20 investigated the relative impact of value added tax on economic growth in nigeria. The impact of tax revenue on economic growth iosr journal. This study a nalyses the impact of non oil tax revenue on economic growth from 1993 to 2012 in nigeria.
The general objective of the study is to investigate the impact of vat on the economic growth of nigeria. International journal of finance and accounting 2018, 72. Taxation, besides its revenue generation capacity, can also be used as a fiscal policy tool to shape the economy. Consumption taxes yielded the largest share of the total tax revenue over 55% in cameroon, cote divoire, mauritius, rwanda and senegal. The impact of taxation on economic growth in south africa. Data were sourced from central bank statistical bulletin and extracted through desk. Also, tax revenue should be judiciously utilized to provide enabling environment for business survival and economic growth in nigeria. Evaluating the impact of value added tax on the economic. The empirical results confirm that there is a negative relationship between taxes and economic growth in south africa. Pdf tax revenue and economic development in nigeria.
This study evaluates the effect of the national tax policy on tax administration in nigeria. Ekeocha 2010 however, made a simulation study advocating value added tax trade from 5 to 15%. The study found that there exist both short run and long run relationship between economic growth and tax revenue. This study examined the impact of etaxation on nigerias revenue and economic growth. Internally generated revenue igr and infrastructural. Abstract this paper attempts to look at the nigeria tax administration and its capacity to reduce tax evasion and generate revenue for development desire of the populace. The roles of value added tax in the economic growth of. 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. 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 most commonly used ones in nigeria are the proportional tax system and the progressive tax system. Pdf this study is on government tax revenue and economic development in nigeria. Okafor 2012 explores the impact of income tax revenue on the economic growth of nigeria as. In 83% of the surveyed countries, effect on tax revenue in nigeria.
He argued that an increase in the rate of value added tax will affect the countrys revenue base. For taxation to make the desired impact on the economic development of nigeria as the major source of government revenue. Development of any tax policy on tax revenue for economic development should better be based on human development index rather than gdp. Impact of etaxation on nigerias revenue and economic. A casual observation reveals that bad governance is often correlated with the state being independent of revenue from taxation of citizens and businesses. Effect of tax evasion on economic development of yobe state, nigeria abdulhamid ellawule department of accounting, federal university, gashua, nigeria abstract this paper intends to evaluate the effect of tax evasion on the economic development of yobe state, nigeria. The nexus between tax revenue and economic growth in nigeria. Identify the effect of tax revenue on labour force lf in nigeria. The work therefore intends to examine whether cross sectional economic growth is enough a viable tax policy in nigeria. Tax revenue and economic growth in nigeria olufemi. The nigerian perspective is because the bulk of revenue needed for development purposes is derived from oil.
The study employed annual time series data spanning the years 19812011. According to ariyo 1997 nigeria s over dependence on oil revenue to the total neglect of other revenue source was encouraged by the oil boom of 197374. 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. Taxation as a critical fiscal policy measure is a veritable tool, for social economic development which has been used by several countries in the world, to further their economic objectives. The impact of tax accounting on economic development of. Regional nonresource taxes 20002015 as percent of gdp6 source. Tax compliance here is proxied in willingness of the citizens to pay tax. Effect of tax evasion on economic development of yobe. The study examined the relationship between tax revenue and economic growth in nigeria. Pdf pthe study examined the relationship between tax revenue and. The taxation revenue on nigeria economic growth comes to lime light considering the incidence of overdependent on oil revenue in nigeria.
The regressive tax system is not commonly used,even in developed countries since this will mean revenue from taxes to the government will only continue to reduce. This is because the state as the second tier of government needs revenue to. 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. 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. 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. The analysis of the study was carried out using the method of multiple regression analysis.
To investigate the relationship between the changes of vat revenue on the economic growth of nigeria 3. The study revealed that companies income tax, petroleum profit and value added tax have a long run impact of 0. Tax revenue is essential to accelerate the economic development basirat et al. The broad objective of this study is to ascertain the effect of tax revenue on economic development in nigeria. Government intervenes in the economy through a variety of policies, of these policies, two are most important. This is important when it is realized that any action taken on vat, as it relates to rgdp will take a year to become effective while taking two years to slow down the economy. Pdf government tax revenue and economic development in. This work examined the nature of tax system, benefits of tax revenue and mechanism that can be adopted to properly harness the revenue from taxation in nigeria.
This is approved for students in accountancy, business, computer science, economics, engineering, arts. The incidence of tax in nigeria is borne directly or indirectly. A study of federal capital territory and selected states 23 research centre for management and social studies selected states in nigeria and to identify the use of taxation to promote economic growth and development in fct and in some selected states in nigeria. An emperical analysis of tax revenue and economic growth. The nigerian experienceproject topics and materials in nigeria. Nigeria the human capital index hci database provides data at the country level for each of the components of the human capital index as well as for the overall index, disaggregated by gender. 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. Investigation of the impact of nonoil revenue on economic. 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.
These include the nature and role of fiscal policy. The index measures the amount of human capital that a child born today can expect to attain by age 18, given the risks of poor health and poor. The study empirically examines the effect of petroleum profit tax ppt on nigeria economy, in line with the objectives of this study, secondary data were obtained from central bank of nigeria statistical bulletin covering the period of 1970 to 2010. Specifically, an attempt will be made to verify the relationship between federally collected revenue and specific tax revenue generation sources. Data and research on income taxes including oecd tax databases, taxing wages, revenue statistics, tax policy studies. Tax and company income tax revenues by at least n315bn every year as well as improving revenue from taxes from the current 6% of gdp which is very low by both ecowas and international standards, to 15% by 2020. However, one means of generating the amount of revenue for providing the needed infrastructure is through a well. May 02, 2015 the study examined the effect of tax compliance on economic growth and development in nigeria.
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. The study examined the impact of tax revenue on the nigerian economy. Nicholas kaldor, taxation for economic development, journal of modern african studies, 1963, p. The main objective of the study is to investigate the impact of taxation revenue on nigeria economic growth. This act regulates the personal income tax throughout the federation. Conceptual background tax revenue mobilization as a source for financing development activities in nigeria has been a. 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. Whereas other african countries such as ghana, tunisia, morocco, and so on, have their tax revenues constituting significant portion of their total revenue and gross domestic product, nigeria being the giant of africa has a significant low taxtogdp ratio when compared with these countries. Taxation and tax policy as government strategy tools for. This paper investigates the impact of taxation on economic growth in south africa.
The effect of value added tax on economic growth in kenya. Nigeria is africas largest oil producer and between 2012 to 2014, the oil sector provided 57% of total government revenue. Impact of etaxation on nigerias revenue and economic growth. Pdf tax revenue and economic growth in nigeria researchgate. The shares of corporate income tax revenue to total tax revenues were significantly higher than the 8. This study assessed the effects of internally generated revenue on infrastructural development in akwa ibom state. The main objective of this paper is to ascertain the impact of tax reforms on tax revenue generation in nigeria. The development of an effective tax administration also stimulated the development of institutions in other parts of the public sector. This paper is an attempt to examine the effective utilization of tax revenue visavis the impact of government expenditure on economic growth and development of nigeria. Rising tax revenues are key to economic development in.
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. The study focuses on the impact of petroleum profit tax, company income tax, personal income tax, value added tax revenue on nigeria s economic growth between 1980 and 20. Indeed the importance of public revenue from the point of view of accelerated economic development could hardly be exaggerated. Together these measures were intended to increase government revenue at a rate of 12. The analysis of the effect of petroleum profit tax on. Tax revenue and economic development in nigeria hrmars.
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