Economic Impact of Tax Revenue on Economic Growth in Nigeria

Abstract

This study assessed the economic impact of tax revenue on Nigeria’s economic growth. This study specifically investigated the significant effect of petroleum profit tax revenue on economic growth in Nigeria, examined significant impact of company income tax revenue on economic growth in Nigeria and evaluated the degree to which value added tax revenue significantly affects economic growth in Nigeria. The study adopted secondary source of data from the Annual Report and Accounts of Federal Inland Revenue Service and CBN Statistical Bulletin from 1995 to 2024. Petroleum profit tax revenue, Company income tax revenue and Value added tax revenue were used to represent tax revenue. Normality test was carried out to confirm whether the data collected are normally distributed or not. Also, descriptive statistics, correlations and multiple regressions were used to analyze the data collected. The findings revealed that company income tax revenue (p = 0.0201 < 0.05) has significant effect on gross domestic product in Nigeria and; petroleum profit tax revenue (p = 0.0674 > 0.05) has no significant effect on gross domestic product in Nigeria; value added tax revenue (p = 0.0146 < 0.05) significantly affects gross domestic product in Nigeria. The study recommended that Efforts should be intensified by the government towards increased collection of tax revenue this is due to the low contribution of tax revenue to GDP over the period of study.