The impact of tax accounting on economic development of nigeria. This act regulates the personal income tax throughout the federation. Tax is a compulsory levy imposed by government on individuals. The study recommends to boost economic growth in nigeria, government should ensure the tax revenue generated are channeled towards building capital stock. According to ariyo 1997 nigerias over dependence on oil revenue to the total neglect of other revenue source was encouraged by the oil boom of 197374. A disaggregated analysis, international journal of academic research in. Therefore, this study analysed revenue collection using the period of 20111015.
Taxation, besides its revenue generation capacity, can also be used as a fiscal policy tool to shape the economy. This study examined the impact of etaxation on nigerias revenue and economic growth. The inability of states and local governments in nigeria to generate enough revenue to cope with their expenditure responsibilities has been a serious challenge. The result indicated a unidirectional causality between tax revenue and economic growth and it flows from tax revenue to economic. Nigeria will be recalculating its gdpin 2014 to reflect structural changes in the economy. 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 impact of internally generated revenue on economic. Over the last 5 years, nigerias gross domestic product gdp growth averaged 6. The objective of the study is to analysis tax revenue collection by the federal.
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. Empirical evidence from nigeria 271 1998, padovano and galli 2002 exemplified that there are negative impact of marginal tax rates and tax progressivity on economic growth. The specific objective of this paper was to explore the effect of income tax revenue on the economic growth of nigeria. The study is aimed at the appraisal of revenue generation in nigeria. The effects of tax revenue on economic growth in nigeria. Pdf tax revenue and economic growth in nigeria researchgate. Tax revenue mobilization as a source for financing development activities in nigeria has been a difficult issue primarily because of various forms of resistance, such as evasion, avoidance and other form of corrupt practices. The incidence of tax in nigeria is borne directly or indirectly. The study period spans economic cycles for about 66 percent of the life of. The study examines the impact of tax revenue on the economic growth of nigeria, judging from its impact on infrastructural development from. Ofurum et al impact of etaxation on nigerias revenue and economic growth.
Impact of value added tax vat on government revenue and economic growth in nigeria 94 revenue to gdp ratio of about 4. In nigeria, nobody can dispute the fact that though this taxes are been collected, they are. Impact of taxation revenue on economic growth of nigeria. For taxation to make the desired impact on the economic development of nigeria as the major source of government revenue. Okafor 2012 explores the impact of income tax revenue on the economic growth of nigeria as. The importance, effect, causes, relationship, comparison, history, role, solutions are discussed. 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. Considering that the nigerian tax laws have witnessed significant changes. Objectives of taxation the main purpose of tax is to raise revenue to meet government expenditure and to redistribute wealth and management of the economy ola, 2001.
Effect of value added tax, customs and excise duties on. There is no doubt that taxation must have affected the economic development of nigeria. Economic and fiscal implications of nigerias rebased gdp gross domestic product gdp is an internationally recognised measure of economy size and strength. It is expected to increase by 4060% and will then become the largest economy in africa. 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. This study uses secondary data which were obtained from the statistical bulletin of the central bank of nigeria cbn covering the period from 1985 to 2015. An emperical analysis of tax revenue and economic growth.
Kaldor 2004 pointed out the importance of government revenue in accelerating economic development. An assessment of the contribution of tax on nigerias economic development and its effects on companies performance in nigeria. Company income tax and nigeria economic development. The effect of tax compliance on economic growth and. 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. The nigerian experienceproject topics and materials in nigeria. Tax revenue is essential to accelerate the economic development basirat et al.
Tax revenue and economic development in nigeria hrmars. In nigeria, the tax reform is spear headed by the federal inland revenue service in its quest to achieve greater revenue collection, encourage voluntary and willing compliance and breaking the long piercing phobia between taxpayers and tax collectors. The impact of value added tax on revenue generation in nigeria. Broadly, the study focused on tax revenue and economic growth in nigeria. Pdf this study is on government tax revenue and economic development in nigeria. Pdf pthe study examined the relationship between tax revenue and economic growth in nigeria. Harelimana, 2018 there is a temporary impact on the tax policy exogenous model growth. Pdf taxation revenue and economic growth in africa semantic. Apart from the revenue function it performs for the government, it is also used to assist the national government to achieve the countrys macro economic objectives in the. Tax compliance here is proxied in willingness of the citizens to pay tax. Thus, this article takes a critical look at the politics of revenue allocation in nigeria and argues that it has remained a continuous exercise since nigerian post independence governance and politics. The exportation of oil in from the first quarter of the 70s shifted the revenue base in favour of oil odusola, 2006, iyoha, 2003. 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.
The impact of tax accounting on economic development of. Personal income tax pit and economic growth in nigeria. Bank of nigeria cbn, currently oil and nonoil tax revenue values by the cbn are. Taxation in nigeria and history of taxation in nigeria a tax in nigeria is a compulsory levy imposed by the federal government of nigeria on individuals and corporate entities in respective of return of service expected from the government. The contribution of taxation to any economy globally cannot be overemphasized. In these studies, researchers used economic development and economic growth interchangeably. However, one means of generating the amount of revenue for providing the needed infrastructure is through a well. Get free research paper on impact of company income tax revenue on the developing economy. Tax revenue and economic development in nigeria citeseerx. The main objective is to analysis how various components of fiscal policy have contributed to the growth rate of the nigerian economy. Effect of tax revenue on economic growth in nigeria iiard. Pdf tax revenue and economic development in nigeria.
The impact of taxation on revenue generation in nigeria. 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. 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. Globalization and nigerian economic development yusuf. Impact of tax administration on government revenue in a. This study investigated the effect of fiscal policy on economic growth in nigeria. The researcher, therefore, conclude that tax revenue can be an instrument of economic development in nigeria. The general objective of this study is to examine the impacts of value added tax on revenue generation in nigeria.
A study of federal capital territory and selected states 23 research centre for management and social studies selected states in nigeria and to identify the use of taxation to promote economic growth and development in fct and in some selected states in nigeria. The study revealed that companies income tax, petroleum profit and value added tax have a long run impact of 0. The paper empirically examined the contribution of vat to the development of the nigerian economy. Some researchers estimated the effect of tax revenue on the economic development of nigeria using gross domestic product gdp. School of business studies, sharda university school of. 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 study adopts the ordinary least square ols regression technique and established that tax revenue has. Economic and fiscal implications of nigerias rebased gdp. The effect of fiscal policy on economic growth in nigeria. Economic development in nigeria oyewo babajide michael 1 1 school of business, department of accounting, covenant university, ogun state,nigeria abstract. An emperical analysis of tax revenue and economic growth in nigeria from 1980 to 2015. 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. A lot of literature exists on tax revenue and economic growth of nigeria adereti et al.
The broad objective of this study is to ascertain the effect of tax revenue on economic development in nigeria. A is so much in terms of quantification and cannot be therefore penalize any company that have registered but evades tax. Development of any tax policy on tax revenue for economic development should better be. This research work studied the impact of value added tax on revenue generation in nigeria. Empirical analysis of effect of tax revenue on economic development of nigeria grace n. However, allowing theimpact of vat to vary with country specifics will shift the effect to become negative though acting in the opposite direction are gains that. The most commonly used ones in nigeria are the proportional tax system and the progressive tax system. Pdf government tax revenue and economic development in. The study examined the effect of tax compliance on economic growth and development in nigeria. The nigerian perspective is because the bulk of revenue needed for development purposes is derived from oil. The improper use of igr and corruption have remained a setback to.
To investigate the relationship between the changes of vat revenue on the economic growth of nigeria 3. An assessment of the contribution of tax on nigerias. The term economic development refers to the improvement in the general standard of living of the people of the society. Therefore, high and weak levels of taxation are favorable to economic growth as upheld by the economic. It is importance to have uptodate data so the rebasing is a step in the right direction. This is important when it is realized that any action taken on vat, as it relates to rgdp will take a year to become effective while taking two years to slow down the economy. Odusola 2006 observed that the nigerian tax system is lopsided and dominated by oil revenue. Government revenue that comes from oil percentage of labour force employed by government.
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. This is approved for students in accountancy, business, computer science, economics, engineering, arts. The main objective of the study is to investigate the impact of taxation revenue on nigeria economic growth. The study investigated the impact of internally generated revenue igr on economic development of nigeria. Tax revenue and economic development in nigeria international. To observe the growth pattern of vat revenue and gdp 2.
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. Evaluate the effect of tax revenue on infant mortality im in nigeria. Taxation and tax policy as government strategy tools for. The general objective of the study is to investigate the impact of vat on the economic growth of nigeria.
Impact of etaxation on nigerias revenue and economic. The study found that there exist both short run and long run relationship between economic growth and tax revenue. Taxation in nigeria plus history of taxation in nigeria. A study on the effect of tax revenue on economic growth and development in nigeria is justified based on the need for the various level of government in nigeria to ensure continuous economic growth and development through the utilization of tax revenue from various taxes ranging from petroleum profit tax, company income tax, custom and excise. Identify the effect of tax revenue on labour force lf in nigeria. In the fourth quarter of 20 the gdpin nigeria increased to 7. Crude oil export has continued to account for over 80% of the total federal government revenue, while the remaining 20% is contributed by nonoil. The study further revealed rise and fall in tax revenue and economic development occasioned by corruption, tax evasion, 2008 economic meltdown, dysfunctionalities in the income tax system, and. Download limit exceeded you have exceeded your daily download allowance.
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