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PROJECT TOPIC: THE EFFECT OF TAX REVENUE ON ECONOMIC GROWTH AND DEVELOPMENT IN NIGERIA

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ABSTRACT

The contribution of taxation to any economy globally cannot be overemphasized. Apart from the revenue function it performs for the government, it is also used to assist the national government to achieve the country’s macro-economic objectives in the areas of fiscal and monetary policies. Over the years, it has been observed that a substantial part of revenue generated in Nigeria is from taxes, yet the role of taxation in promoting economic activities and growth is not felt, mainly because of feasible evidences which cannot be seen nor perceived by the citizens in terms of infrastructure and basic amenities. Past documentations have revealed that revenue from taxes in developed nations have high impact on its economic growth which clearly seen by the amenities provided by such nations. Thus the main objective of this study is to explore the relationship between tax revenue and economic growth and development in Nigeria. Multiple Linear Regression analysis was used to analyze the data by employing the use of Microsoft Excel package. The findings revealed that petroleum profit tax, company income tax and value added tax have a positive impact on Nigeria’s economic growth while custom excise and duties impacted negatively but overall, a significant relationship between tax revenue and the Nigerian economic growth exists. The utilization of the generated revenue from taxes calls for serious concern, and requires a special attention of policy makers, non-compliance with tax laws on the part of the tax payers is a hindrance and ineffective administration of tax has given enough loop holes for tax evasion, the consequence of which is poor revenue. It is recommended among others that only skilled and professionals and trustworthy hands should be responsible for tax administration and the general public should be educated right from the grass root on the importance of taxes to the entire nation.


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