For correspondence:-
Received: 13 Feb. 2018 Accepted: 25 March 2018 Published: 31 March 2018
Citation: Federally Collected Tax Revenue and Economic Growth of Nigeria: A Time Series Analysis. Account Tax Rev 2003; 2(1):24-38 doi:
© 2003 The authors.
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Abstract
This study evaluates the relationship between federally collected tax revenues and Nigeria’s economic growth rate between 2000 and 2016.The study adopted causal descriptive research method, and the data were drawn from annual reports of the Central Bank of Nigeria (CBN) and Federal Inland Revenue Services (FIRS) publications. The data analysis was based on the Johansen Co-Integration test showing that a meaningful long-run relationship exists between Federally Collected Tax Revenue (FTCR) and Gross Domestic Product (GDP) of Nigeria.Specifically, Custom and Excise Duties (CED) and Value-Added Tax (VAT) and Petroleum Profit Tax (PPT) Granger caused growth rate of Gross Domestic Product (GDP). This implies that proper and efficient administration of laws of these tax components will bring the desired improvement in the tax system and will greatly enhance revenue to the government for the implementation of her policies and programmes. The study, therefore, recommends that those policies that enhance tax compliance, such as reduction in the rates of taxes; blocking of income leakages should be put in place and this will stimulate economic growth and development in the short and long run. Also, regular monitoring of the taxpayers for tax compliance as well as increased education of the taxpayers will further stimulate an increase in revenue generated through the tax system.
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