Taxation and Nigerian Economic Growth Process

G. O. Salami, K. H. Apelogun, O. M. Omidiya, O. F. Ojoye


This study empirically investigates the impacts of taxation on the growth of the economy. The Nigerian government has embarked on monitoring its collection but the economy has failed to experience the desired growth that will lead to the targeted economic development.The chosen economic growth indicator, the real Gross Domestic Product (RGDP), is specified to depend on the taxation indicators which are the petroleum profit tax (PPT), company income tax (CIT), customs and excise duties (CED), value added tax (VAT).  The study employed the use of both simple and multiple linear regression analysis of the ordinary least square method. These were used to determine the impact and relationship between the endogenous variable, RGDP, and the exogenous variables, PPT, CIT, CED and VAT. It was discovered that if all the exogenous variables were tested individually on the economic growth, they show a significant impact individual on economic. The F-statistic shows that the overall model is statistically significant.This paper therefore recommends that the fiscal laws and regulations of the government should be strengthened so as to checkmate tax offenders, improve tax administrative machinery and transparency of government officials that are involve in tax revenue management.

Keywords: real Gross Domestic Product, Petroleum Profit Tax, Company Income Tax, Customs and Excise Duties, Value Added Tax, Economic Growth

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