Impact of Tax Revenue on Economic Growth in Nigeria From 1999 to 2020
CHAPTER ONE
Objective of the study
The objectives of the study are;
- To ascertain the influence of Petroleum Profit Tax on economic growth in Nigeria
- To assess the impact of companies’ income tax on economic growth in Nigeria
- To examine the impact of customs and excise duties on economic growth in Nigeria
- To determine the impact of VAT on the economic growth
CHAPTER TWO
LITERATURE REVIEW
Introduction
Taxation is amongst the main stay of every nation and the level of development of any country depends on the amount of revenue generated through taxation and other viable means. The importance of tax in an economy and the ability of government to provide infrastructure and social services cannot be over emphasized. Taxation is one of the most contentious issues in governance both developed and developing nations of the world. Taxes underwrite and explain the capacity of government to discharge its basic duties to the citizens. In fact, in developing countries of the world, taxation is the basis for conduct of government /society relations and is at the epi-center of domestic policy in national election debate (Uzor, 2015) Taxation unarguably is one among other means of revenue generation of any government to meet the need of both the government and citizens. According to Ifurureze and Ekezie (2014), tax is a compulsory levy imposed by the government against the income, profit, property, wealth and consumption of individuals and corporate organizations for the common use and to serve a number of purposes. Taxation enhances the macro-economic indexes of a country and speedy up development in all spheres of human endeavor, thereby creating employments and balance of trade.(Aboyade, 2010). It enhances the financing of public goods, regulate production and consumption patterns as well as serve as vehicle for the protection of infant industries as well reduce income inequality. Okoye, 2014 opines that taxation provides basic amenities, protects the lives and property of the citizens as well as create the enabling environment for individuals and corporate organizations to strive. However. For the government to accomplish these responsibilities, it needs to mobilize enough revenue through taxation of the citizens and her cooperate organizations
Economic Growth
Olu and Idih (2015), cited the work of Dwivedi of 2004, mentioned that economic growth is a sustained increase in per capita national output or net national product over a long period of time. This implies that the rate of increase in output should be greater than the rate of growth in population. Another quantification of economic growth is that national output should be composed of such goods and services, which satisfy the maximum want of the maximum number of people. Economic growth is the quantitative increase in the monetary value of goods and services produced in an economy within a given year. It is measured as a percentage change in the Gross Domestic Product or Gross National Product. Haller (2012) posited that economic growth is the complex long run phenomenon subjected to constraints like excessive rise of population, limited resource, inadequate infrastructures, inefficient utilisation of resources, excessive governmental intervention, institutional and cultural models that make the increase different.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitutes of individuals or elements that are homogeneous in description.
This study was carried to examine impact of tax revenue on economic growth in Nigeria 1999 to 2020. CBN forms the population of the study.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
TEST OF HYPOTHESIS
H0: there is no influence of Petroleum Profit Tax on economic growth in Nigeria
H1: there is influence of Petroleum Profit Tax on economic growth in Nigeria
H0: there is no impact of customs and excise duties on economic growth in Nigeria.
H2: there is impact of customs and excise duties on economic growth in Nigeria.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain impact of tax revenue on economic growth in Nigeria from 1999 to 2020. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of tax revenue on economic growth in Nigeria from 1999 to 2020
Summary
This study was on impact of tax revenue on economic growth in Nigeria from 1999 to 2020. Four objectives were raised which included; To ascertain the influence of Petroleum Profit Tax on economic growth in Nigeria, to assess the impact of companies’ income tax on economic growth in Nigeria, to examine the impact of customs and excise duties on economic growth in Nigeria and to determine the impact of VAT on the economic growth. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from CBN. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
Findings from this study provide insight into the impact of tax revenue on economic growth. It further provided an insight as to the extent to which each of the independent variables affects the dependent variable. There is evidence of co-integration among the variables. Petroleum Profit Tax, Value Added Tax and Government Domestic Debt have positive and significant impact on economic growth, this implies that increase in the proceeds from these taxes will boost economic growth. While Company Income Tax and Customs and Excise Duties have negative and significant impact on economic growth. This implies that increase in tax from these two sources will result to a fall in the level of economic growth in Nigeria
Recommendation
- Efforts should be intensified by the government towards increased collection of PPT and VAT; this is due to the contribution of both PPT and VAT revenue to GDP over the period of study. This can be done through blocking all loopholes in our tax laws as well as bringing more prospective tax payers into the tax net.
- There should be stringent penalty imposed on any individual or corporate body who indulges in any form of tax malpractices irrespective of states, if the positive correlation between tax revenue and economic growth should be maintained
References
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