Tax Revenue and Productivity of Nigeria

TAX REVENUE AND PRODUCTIVITY OF NIGERIA

Okonkwo, Olivia Ogechukwu¹; Amahalu, Nestor Ndubuisi¹ & Obi, Juliet Chinyere

1 Department of Accountancy, Nnamdi Azikiwe University Awka, Anambra State, Nigeria

Abstract

This study ascertained the relationship between Tax Revenue and Productivity of Nigeria for sixteen years ranging from 2005-2020. Specifically, this study ascertained the relationship between Value Added Tax, Petroleum Profit Tax, Personal Income Tax and Gross Domestic Product per Capita. The time series data sets used in this study were obtained from Central Bank of Nigeria Statistical Bulletin, Securities and Exchange Commission Office publications, National Bureau of Statistics publications and World Bank Statistical Bulletin for the study period. Longitudinal research design was employed. Inferential statistics using Augmented Dickey-Fuller (ADF) test, Pearson correlation coefficient, Ordinary Least Square regression analysis, Granger Causality test, Johansen Co-integration test and Error Correction Model were applied to test the hypotheses of the study. The specific findings showed that there is a significant but negative relationship between Value Added Tax and GDP per Capita (β₁ = -0.383441; p-value = 0.0342); a significant but negative relationship between Petroleum Profit Tax and GDP per Capita of Nigeria at 5% level of significance (β₂ = -0.385457; p-value = 0.0305); a significant but negative relationship between Personal Income Tax and GDP per Capita of Nigeria at 5% level of significance. The study recommended inter alia that Federal Government should take strict measures to close all administrative loopholes in the administration and management of tax in Nigeria. If this is done, the revenue accruable from taxation will increase and boost provision of social amenities and infrastructures in Nigeria.

Keywords: Value Added Tax, Petroleum Profit Tax, Personal Income Tax, Gross Domestic Product per Capita

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Okonkwo, O.O; Amahalu, N.N & Obi, J.C (2022). Tax Revenue and Productivity of Nigeria. African Journal of Business and Economic Development, 2(1), pp26-40. Available online at: https://www.ijaar.org/articles/ajbed/v2n1/ajbed-v2n1-Jan22-p2122.pdf.

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