For correspondence:-
Received: February 04 2022 Accepted: March 23 2022 Published: March 31 2022
Citation: Taxation in Period of Economic Crisis: Lessons for Nigeria. Account Tax Rev 2007; 6(1):48-58 doi:
© 2007 The authors.
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Abstract
The study examined tax policy that can speed up economic recovery and growth in Nigeria. Data for the study on Gross Domestic Product (GDP) growth rate (dependent variable) and Company Income Tax Rate (CITR), Personal Income Tax Rate (PITR) Value Added Tax Rate (VATR) Import Tax Rate (IMPTR), Export Tax Rate (EXPTR) and petroleum Profit Tax Rate (PPTR) were collected. The explanatory variables were obtained from the Central Bank of Nigeria (CBN) and National Bureau of Statistics (NBS) bulletins from 2017-to 2021. The autoregressive Distributed Lag (ARDL) technique was used for the analysis. The bounds cointegration test result provides evidence of a long-run relationship between the variables. Further, it was also found that VATR, IMPTR and PPTR showed positive signs, and CITR, PITR and EXPTR showed negative signs in both the short and long run. The result is an indication that while an increase in CITR, PITR and EXPTR would be harmful to economic recovery and growth during an economic recession/crisis, on the other hand, an increase in VATR, IMPTR and PPTR is not harmful. It is recommended that the government as a matter of policy reduce her CITR, PITR and EXPTR. Further, while VATR should be left unaltered since it was increased in 2020, PPTR and IMPTR particularly IMPTR should be increased for the long-term benefit of a measure of economic independence the tax policy can fetch the nation.
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