Effect Of Tax Revenue On Economic Growth Of Nigeria (2000-2014)

ABSTRACT

 The revenue profile of Nigeria consists of revenue from oil and gas, and non-oil revenue (taxation) with the oil sector accounting for over 70% of the total revenue. The main objective of this study is to determine the effect of tax revenue on economic growth of Nigeria. Time series data ranging from 2000-2014 of tax revenue were extracted from the Central. Bank of Nigeria statistical bulletin 2013 and various annual reports, Federal Inland Revenue Service and the National Bureau of Statistics in carrying out this research work . Ordinary least squares Regression analysis was used to analyze the data. The findings reveal that Petroleum profit tax has signIcant effect on economic growth of Nigeria at 2.2%, company income tax has signcant effect on economic growth of Nigeria at 1%, Custom and excise duties tax has significant effect on economic growth of Nigeria at .5% and Value added tax has signflcant effect on economic growth of Nigeria at .9%. Overall, a signIcant relationshzp between tax revenue and economic growth of Nigeria exists. Therefore, the study recommends that government should intens/j' efforts in generating tax revenue, establish a strong fiscal responsibility and transparency system in the country, adopt tax reforms that would encourage increase in investment, particularly attracting foreign direct investment, fight corruption, invest generated revenue in critical infrastructure so as to provide the enabling environment to foster stability and economic growth in the economy.