This research work studied the impact of value added tax on revenue generation in nigeria. The study examined the effect of tax compliance on economic growth and development in nigeria. Angola, nigeria, and south africa make up 55 percent of the regions aggregate gdp estimated at market exchange rates. 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 general objective of this study is to evaluate the impact of tax policy on economic growth of nigeria. Empirical analysis of effect of tax revenue on economic development of nigeria grace n.
The impact of taxation as an aid to economic development in enugu state includes abstract and chapter one, complete project material available the impact of taxation as an aid to economic development in enugu state a case study of oji river local government area, enugu state, nigeria proposal the research work will discuss in detail the impact of taxation as an aid to economic. The main objective of the study is to investigate the impact of taxation revenue on nigeria economic growth. Subsaharan africa region fdi indicators south east asia 35 no. The study investigates the effect of informal sector tax proceeds on capital development in lagos metropolis. The choice of the study period provides an opportunity for. But the publisher and chairman of the guardian, lady maiden ibru, at the just concluded maiden edition of economic forum series on. The main objective of this paper is to ascertain the impact of tax reforms on tax revenue generation in nigeria. Taxation, besides its revenue generation capacity, can also be used as a fiscal policy tool to shape the economy. This study is aimed at filling this gap, therefore, it examines the impact of tax incentives on foreign direct investments in the oil and gas sector in nigeria. The effects of tax revenue on economic growth in nigeria. Ofurum et al impact of etaxation on nigerias revenue and economic growth.
Whatever the prevailing ideology or political situation of a particular country, it must steadily expand a host of non revenue yielding services such as education, health, infrastructure, and social security. The study period spans economic cycles for about 66 percent of the life of the country, since attaining political independence in 1960. The study adopted expost facto design to obtain secondary data, covering 20 years 20002019 from the lagos state internal revenue service and the ministry of budget and planning. Download limit exceeded you have exceeded your daily download allowance. Impact of nonoil tax revenue on economic growth 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. For this reason, the entire ownership and control of petroleum wherever it is found in nigeria is vested in the federal government. More over in nigeria the revenue from vat is routinely shared out according to agreed. The impact of indirect tax revenue on economic growth. Tax revenue and economic development in nigeria international. 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. Secondary data were used in this study, the data were collected from cbn statistical bulletin also gathered from journals and textbook that is related to the research topic, the study. An empirical analysis of the effect of tax revenue on the economic development of nigeria.
Whatever the prevailing ideology or political situation of a particular country, it must steadily expand a host of nonrevenue yielding services such as education, health, infrastructure, and social security. Government revenue that comes from oil percentage of labour force employed by government. This study examined the impact of etaxation on nigerias revenue and economic growth. The following points highlight the nine main sources of government revenue. Ascertain the relationship between tax policy and economic growth in nigeria. The objective of the study is to examine the effect of tax revenue on economic. European journal of business and management, 10 20, 4248. In generating revenue to achieve this goal, the tax system is expected to minimize distortion in the economy. Mar 27, 2016 for taxation to make the desired impact on the economic development of nigeria as the major source of government revenue. Oct 23, 2014 this research work studied the impact of value added tax on revenue generation 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. The incidence of tax in nigeria is borne directly or indirectly.
The impact of value added tax on revenue generation in nigeria. Conceptual background tax revenue mobilization as a source for financing development activities in nigeria has been a. Product gdp as the dependent variable and petroleum. This study examines the effect of tax revenue on economic growth in nigeria, utilizing time series data for the period spanning from 1970 to 2011. Role of taxation in financing economic development economics. Examine the relationship between direct tax revenue and economic growth of nigeria. The impact of tax accounting on economic development of. Relevance of tax revenue resources to infrastructural. The sale of real estate properties is subject to a 10% tax on the gains.
Below is a summary of the tax and economic measures announced by the federal inland revenue service firs, central bank of nigeria cbn and proposals by the house of representatives hors in the emergency economic. Nigeria introduces tax and economic measures in response to. In india, for example, the contribution of direct taxes to total tax revenue was 18. Impact of etaxation on nigerias revenue and economic. The journal of accounting and management, vol 9, no 2 2019. Effect of informal sector tax revenue on capital development. International monetary fund, world economic outlook, october 2018. The oecd s work on tax policy and statistics focuses on providing internationally comparable revenue statistics and offers highquality economic analysis and tax policy advice. 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. Pdf tax revenue and economic growth in nigeria researchgate. Pdf the dwindling price of crude oil has lowered the revenue generation to government thereby, impacting negatively on the nigeria.
The effect of tax compliance on economic growth and. 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 impact of tax accounting on economic development of nigeria. 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. 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. The analysis of the study was carried out using the method of multiple regression analysis. Total tax revenue and total federal government revenue from 1 %4 to 2008. Impact of taxation revenue on economic growth of nigeria. Effect of tax policy on economic growth in nigria 199420. 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. Data were sourced from the central bank of nigeria statistical bulletin, united nations development programme and federal inland revenue. Vat as a tax has contributed immensely on the economic growth of.
The study period spans economic cycles for about 66 percent of the life of. The impact of tax incentives on foreign direct investment. Kaldor 2004 pointed out the importance of government revenue in accelerating economic development. However, one means of generating the amount of revenue for providing the needed. For taxation to make the desired impact on the economic development of nigeria as the major source of government revenue. 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 examines the impact of tax revenue on the economic growth of nigeria, judging from its impact on infrastructural development from. A tax is a compulsory levy imposed by a public authority against which tax. The study employed annual time series data spanning the years 19812011. Economic report on nigeria 2015 1 introductory remarks this special edition of the economic report on nigeria aims at serving a dual purpose. An emperical analysis of tax revenue and economic growth. The nigerian perspective is because the bulk of revenue needed for development purposes is derived from oil. The general objective of this study is to examine the impacts of value added tax on revenue generation in 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. First, it serves as an instrument for engaging the new administration of the federal government on the policy imperatives for sustainably transforming the nigerian economy. So, in order to raise adequate resources for development, the government is forced to extend the coverage of indirect taxes on mass consumption goods. Total tax revenue and total federal government revenue from. Petroleum profit tax revenue from petroleum profit tax is the most significant source of revenue of the nigeria government, accounting for over 90% of its total foreign exchange earnings. They enshrine best practices in terms of ethical and professional conduct.
Tax laws stipulate what constitutes offence and the appropriate sanctions to each offence. An emperical analysis of tax revenue and economic growth in. Tax revenue and economic development in nigeria citeseerx. Effect of value added tax on the nigerian economy oraka, azubike o. Value added tax vat in nigeria is levied on all products and services traded within the country and payable to government at a 5% rate, one of the lowest in the world.
The most commonly used ones in nigeria are the proportional tax system and the progressive tax system. May 02, 2015 the study examined the effect of tax compliance on economic growth and development in nigeria. Tax revenue is essential to accelerate the economic development basirat et al. 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. This act regulates the personal income tax throughout the federation. The study is aimed at the appraisal of revenue generation in nigeria.
Specifically, an attempt will be made to verify the relationship between federally collected revenue and specific tax revenue generation sources. Taxation and tax policy as government strategy tools for. Pdf government tax revenue and economic development in. The effects of tax revenue on economic growth in nigeria1970. Government intervenes in the economy through a variety of policies, of these policies, two are most important. Harelimana, 2018 there is a temporary impact on the tax policy exogenous model growth. Nigeria introduces tax and economic measures in response. The impact of taxation as an aid to economic development in enugu state includes abstract and chapter one, complete project material available the impact of taxation as an aid to economic development in enugu state a case study of oji river local government area, enugu state, nigeria proposal the. Public income received through the administration, commercial enterprises, gifts and grants are the source of nontax revenues of the government. Federal inland revenue service firs we do our best to provide accurate and up to date information. Pdf tax revenue and economic growth of nigeria researchgate.
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 that were surveyed. The main aim of this research is to analyse the relationship between total tax revenue and economic growth in nigeria. Implications of tax revenue on economy growth in nigeria. A high tax rate would deter saving and development, while a lower tax rate would lead to less revenue to the state. Thus, taxes constitute an important source of development finance. The roles of value added tax in the economic growth of nigeria. A tax directly influences the savings of individuals and companies. Relevance of value added tax on infrastructural development in nigeria adereti, sanni and adesina 2011, uses time series data to study the effect of value added tax on the gross domestic product gdp. The study found that there exist both short run and long run relationship between economic growth and tax revenue.
Encouragingly, both tax capacity and efficiency in revenue mobilization are increasing regionwide, contributing to the 4 percentage point increase in taxtogdp ratio over the past two decades or so. The result indicated a unidirectional causality between tax revenue and economic growth and it flows from tax. Crude oil export has continued to account for over 80% of the total federal government revenue, while the remaining 20% is contributed by nonoil. 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. Taxes imply a forced saving in a developing economy. Read more about our work with tax playing an important role in the response to the coronavirus covid19 pandemic, the oecd has outlined a range of emergency tax measures governments could. Impact of etaxation on nigerias revenue and economic growth. Tax compliance here is proxied in willingness of the citizens to pay tax. Nigeria has attempted several tax reforms over the years that have gained momentum with the. The roles of value added tax in the economic growth of.
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