Taxation Alternative Source of Revenue in Nigeria: A Domineering Evidence of Petroleum Profit Tax

Odoemelam Ndubuisi


The study firstly, theoretically unveiled militating factors bedevilling and denying Nigerian government revenue from the taxation. Some of these factors are free rider problem, the vicious circle of negligence, the monster called corruption, terrorists and militancy, rich tax dodgers, ‘oso’ tax and others. Secondly, data were collected through the secondary source for the period of 12yrs (2004-2015). The regression analysis results indicate an overall statistical significant relationship between tax income and total revenue. Notwithstanding the overall statistical significance that exists between the tax revenue and total revenue, Petroleum Profit Tax (PPT) was the only predictor that was statistically significant which proves domineering and dependence on oil revenue. Corporate Income tax, Value Added Tax, Customs Excise Duty and Education Tax were insignificant. I attribute this to low tax collection mechanisms, poor workforce coupled with other factors. However, Ogun State and other four states showed real evidence of reasonable reliance on taxation as an alternative source of revenue to finance public projects. To overcome the present fall in revenue generation, we recommended certain actions to be taken to improve the system for a better result.

Keywords: Taxation, Free rider problem, the Vicious circle of negligence, Revenue generation, Poor Collection Mechanism, Corruption in Nigeria

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