Tag Archives: Tax Revenue

Impact of Tax Revenue on Economic Development in Nigeria (1997-2018) (Published)

The main objective of the study is to ascertain the influence of tax revenue on economic development of Nigeria. The specific objectives are; to determine the influence of petroleum profit tax, company income tax and value added tax on economic development proxy by human development index (HDI). Annual time series data, from CBN and FIRS from 1997 to 2018 was used. The study used regression analysis. The result showed that petroleum profit tax and company income tax have significant effect on economic development while value added tax does not significantly influence economic development. The implication of the finding is that the higher the amount of tax revenue generated, the higher the level of economic development experienced by the economy. This implies that taxes that have positive effect on economic development are direct taxes, thus direct taxes exert more significant influence on economic development of Nigeria than indirect taxes. This anomaly was attributed to dysfunctional ties in tax system, loopholes in tax law and inefficient tax administration. The lower the amount of revenue generated from tax the lower the quality of development to be witnessed. Government will generate higher revenue if they strengthen the legal and regulatory framework in order to control tax evasion and tax avoidance by taxpayers, improve on the system of tax administration, .The paper therefore recommended that tax policy makers such as federal inland revenue services and other tax regulatory bodies should strengthen their regulation on tax compliance mostly on tax that are direct based to curb tax evasion and tax avoidance by tax payers, adopt strategies to improve system of tax administration, by training and re- training of tax administrators through seminars and conferences to be abreast of modern trend in tax administration in order to generate more income for development.

Keywords: Gross Domestic Product, Tax Revenue, Taxation, direct and indirect tax, economic growth

Tax Revenue Volatility and Economic Growth in Nigeria (Published)

Over the years Nigeria has experienced downward slope in its productivity and economic growth. This is evident in the country’s inability to deliver on national plan, high rate of unemployment, poor road networks, low quality education and low standards of living. In all these, studies have shown low and unsteady revenue generation in the country. This study investigated tax revenue volatility on economic growth in Nigeria, using inflation and exchange rates as moderating variables. This study adopted ex post facto research design. Data were obtained from certified sources; namely, National Bureau of Statistics, Central Bank of Nigeria Statistical Bulletin and Federal Inland Revenue Services for the 1981Q1-2017Q4, amounting to one hundred and eight (108) observations. Data were exposed to the scrutiny of the appropriate regulatory agencies for validity and reliability. Pre-estimation tests were conducted using Pearson correlation and stationarity tests. The post-estimation tests included linearity, Heteroskedasticity, Breusch-Godfrey serial Correlation Lagrangian Multiplier and stability test. Data were analyzed using both descriptive and inferential statistics. Findings revealed that tax revenue volatility moderated by inflation rate and exchange rate had significant effect on economic growth (EG) in Nigeria (Adj. R2 =0.6, F (3, 105) =2140.285, p <0.05; β1 = 0.219). This study concluded that tax revenue volatility affects economic growth in Nigeria. It was recommended that government should formulate tax policies that will encourage steady tax revenue. In addition, government should ensure prudent application of tax fund to the development of infrastructure that would translate into economic growth.

Keywords: Tax Revenue, economic growth, gross domestic products, tax bribe, tax compliance costs, tax penalty, tax volatility

Petroleum Profit Tax Volatility and Economic Growth in Nigeria (Published)

Nigeria has experienced downward slope in its productivity and economic growth. This affects the macroeconomic environment as it is evident that the country has challenges in fixing their roads, challenging in achieving national plan, high rate of unemployment, low quality education and low standards of living. In all these, studies have implicated low and unsteady revenue generation in the country. This study investigated petroleum profit tax volatility on economic growth in Nigeria, using inflation and exchange rates as moderating variables. This study adopted ex post facto research design. Data were obtained from certified sources; namely, National Bureau of Statistics, Central Bank of Nigeria Statistical Bulletin and Federal Inland Revenue Services for the 1981Q1-2017Q4, amounting to one hundred and eight (108) observations. Data were exposed to the scrutiny of the appropriate regulatory agencies for validity and reliability. Pre-estimation tests were conducted using Pearson correlation and stationarity tests. The post-estimation tests included linearity, Heteroskedasticity, Breusch-Godfrey serial Correlation Lagrangian Multiplier and stability test. Data were analyzed using both descriptive and inferential statistics. Findings revealed that Petroleum profit tax volatility had positive and significant effect on EG in Nigeria (R2 = 0.56, β1 = 0.422, t(107) = 6.927, p<0.05). This study concluded that Petroleum profit tax volatility affects economic growth in Nigeria. It was recommended that government should formulate tax policies that will encourage steady tax revenue. In addition, government should ensure prudent application of tax fund to the development of infrastructure that would translate into economic growth

Keywords: Petroleum Profit Tax, Tax Evasion, Tax Revenue, economic growth, gross domestic products, petroleum profit tax volatility, tax volatility

Nigeria beyond Oil: The Imperative of Diversification of the Nigerian Economy (Published)

This study appraised the nexus between economic growth and the diversification of the Nigerian economy, via the non-oil sector, with specific reference to the danger posed by over-reliance on oil export. The annual time series data that span through the period of 1980 and 2018 were applied. The Error Correction Mechanism (ECM) was adopted to help gauge the long-run and short-run dynamics of the Nigerian economic growth. Results of the empirical analysis revealed that the non-oil sector is actually the future of the Nigerian economy, as all the non-oil variables shown positive and significant relationship between them and economic growth, except ICT and Tax Revenue that were not significant and negative respectively. It is therefore recommended that policy makers should think in the direction of a non-oil economy to guarantee speedy growth of the Nigerian economy.

 

Keywords: Diversification, Dutch Disease, Tax Revenue, oil-rich economies

Economic Performance and Accrual Accounting Reform: OECD versus Non-OECD Countries (Published)

This paper examines whether economic performance indices of nations signals accrual accounting reform or whether they have random effect. The secondary analysis of accrual accounting data distilled from the report of the PWC global survey of accounting and financial reporting practices of 100 central governments was done using the logistic multiple regression model. Economic performance proxied by gross domestic product per capita positively signaled the likelihood of accrual accounting reform with OECD countries 10 times more likely to implement full accrual accounting than non-OECD countries. Growth rate of gross domestic product and debt as percentages of gross domestic product both negatively signaled the adoption accrual accounting reform while tax revenue as percentage of gross domestic product returned a mixed result. The results suggest that poorer non-OECD countries may be constrained by the cost of implementing accrual accounting reform and may therefore require assistance of multilateral development institutions. This study provides empirical evidence of some of the constraints militating against accrual accounting reform that have been canvassed in the literature.

Keywords: Gross Domestic Product, Public Debt, Public Finance, Public Sector Accounting, Tax Revenue, economic growth

Tax Revenue and Nigerian Economic Growth (Published)

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 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. Data collected from Central Bank of Nigeria (CBN) Statistical Bulletin and National Bureau of Statistics (NBS).The study utilized both descriptive and Paired Sample T-test with the aid of Statistical Package for Social Science (SPSS) Version 23.The findings showed that, oil and non oil tax revenue were positive and strongly correlated with Real Gross Domestic Product (RGDP) with coefficient( r = .902, P< 0.05) and (r = .975, P< 0.05). The results also showed that, there was significant difference between the effects of oil and non oil tax revenue on RGDP as shown ( t29 = 11.424 , P< 0.05) and ( t29 = 10.968, P< 0.05). Findings also showed that, oil and non oil tax revenue contributed 7.7% and 2.5 % to RGDP from 1986-2015. This research work concluded that, there was significant difference between the effects of oil and non oil tax revenue on economic growth in Nigeria. There should be accountability and transparency from government officials on the management of revenue derived from taxation (oil and non oil) in Nigeria.

Keywords: Oil and Non Oil, Real Gross Domestic Product, Tax Revenue, economic growth

Empirical Analysis of Tax Revenue Collection by the Federal Government in Nigeria (Published)

The main objective of this study is to analysis tax revenue collection by the Federal government in Nigeria. The study adopted quantitative research design; the secondary data will be obtained from the FIRS in respect of the total tax revenue collected from the oil and non-oil taxes for the period of 2011-2015. The population of the study is made up of Federal Inland Revenue Services and the sample size is Planning, Reporting and Statistics Departments. The findings from the study revealed that Capital Gains Tax, Stamp Duty, Education Tax and Petroleum Profit Tax are positively significant at 1%, 5% and 10% respectively while Company Income Tax and Value Added Tax are not significant.  However, Company income tax has more total collected revenue than all the remaining variables. Therefore, it is recommended that government should enhance the collection of tax revenue processes and ensure that any deviations from compliance with the laid down rules and regulations are severally dealt with and punished accordingly

Keywords: FIRS, Federal government, Nigeria, Tax Revenue, revenue collection

Tax Buoyancy and Elasticity in Nigeria: The Case of Aggregate Tax (Published)

This study was motivated by the growing demand for government funds to meet up with their expenditures as well as diversification for different streams of income. Empirical evidence has shown that the buoyancy and elasticity of tax are two clear ways of measuring how tax revenue responds to changes in income. This study adopted secondary data sets, which were sourced from CBN statistical Bulletin, National Bureau of statistics (NBS) and Federal Inland Revenue Service (FIRS) of Nigeria. A standard multiple regression estimation procedure in the form of the vector error correction model (VECM) model was adopted. The result from the study showed that tax revenue is significantly buoyant and elastic in Nigeria. In view of the result the study recommended among others that, the government introduces policies that will help her take advantage of the potentials inherent in the country and increase its tax revenue thereby having another source of financing its budget other than the current crude oil proceeds.

Keywords: GDP, Nigeria, Tax Buoyancy, Tax Elasticity, Tax Revenue

TAX BUOYANCY AND ELASTICITY IN NIGERIA: THE CASE OF AGGREGATE TAX (Review Completed - Accepted)

This study was motivated by the growing demand for government funds to meet up with their expenditures. Empirical evidence has shown that the buoyancy and elasticity of tax are two clear ways of measuring how tax revenue responds to changes in income. This study adopted secondary data sets, which were sourced from CBN statistical Bulletin, National Bureau of statistics (NBS) and Federal Inland Revenue Service (FIRS) of Nigeria. A standard multiple regression estimation procedure in the form of the vector error correction model (VECM) model was adopted. The result from the study showed that tax revenue is significantly buoyant and elastic. In view of the result the study recommended among others that, the government introduces policies that will help her take advantage of the potentials inherent in the country and increase its tax revenue thereby having another source of financing its budget away from the current crude oil.

Keywords: GDP, Nigeria, Tax Buoyancy, Tax Elasticity, Tax Revenue

MOBILIZING DOMESTIC REVENUE FOR SUSTAINABLE DEVELOPMENT IN AFRICA (Published)

Taxation provides governments with the funds needed to invest in development including in relieving poverty and deliver public goods and services. It offers an antidote to aid dependence in developing countries and provides fiscal reliance and sustainability that is needed to promote growth. Domestic resource mobilization fulfils two key objectives sought by developing countries: predictable and sustainable financing on the one hand and a reduction in long-term dependence on aid on the other. Tax resources allow a state to finance itself without resorting to printing money or foreign indebtedness. They, therefore, hold the key to economic stability; enabling investment in infrastructure, proactive social policies, and the accumulation of savings. Taxation is integral to strengthening the effective functioning of the state and to the social contract between governments and citizens. By encouraging dialogue between states and their citizens, the taxation process is central to more effective and accountable states. In the short run, strategies towards more effective, efficient and fair taxation in Africa typically lie with deepening the tax base in administratively feasible ways. Policy options include removing tax preferences, dealing with abuses of transfer pricing techniques by multinational enterprises and taxing extractive industries more fairly and more transparently. The paper highlights the challenges of Africa mobilizing domestic revenue for sustainable development, review some relevant literature and make some suggestions such as well-designed tax system to consolidate stable institutions, increase revenues, refocus government spending on public priorities and improve democratic accountability

Keywords: Mobilizing, Sustainable Development, Tax Revenue