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Does Taxation Propel Economic Growth In Nigeria?

Author

Listed:
  • Etim Osim Etim

    (Department of Accounting, Faculty of Business Administration, University of Uyo, Uyo-Nigeria)

  • Nsima Johnson Umoffong

    (Department of Accounting, Faculty of Business Administration, University of Uyo, Uyo-Nigeria)

  • Ihenyen Joel Confidence

    (Department of Accounting, Faculty of Management Science, Niger Delta University, Yenegoa, Bayelsa State, Nigeria)

Abstract

The study examined the relationship between taxation and economic growth proxy by Per Capita Income (PCI) in Nigeria from 1985 to 2018 data were collected from Central Bank of Nigeria (CBN) and Federal Inland Revenue Service (FIRS) for various years on Companies Income Tax (CIT), Personal Income Tax (PIT), Value Added Tax (VAT), Petroleum Profit Tax (PPT) and Per Capita Income (PCI) from Socio-Economic Statistics Report by National Bureau of Statistics (NBS). The data were analysed using multiple regression technique. Findings reveal inverse and significant relationship between company income tax and per capita income, while, Personal Income Tax, Value Added Tax Petroleum profit tax shows positive relationship. Thus, the contention as to whether taxation propel economic growth in Nigeria cannot be rightly answered with a ‘Yes’ or ‘No’ response since the results from our study were mix. It was recommended that policy makers should focus on tax incentives that would boost investment in the manufacturing sector.

Suggested Citation

  • Etim Osim Etim & Nsima Johnson Umoffong & Ihenyen Joel Confidence, 2020. "Does Taxation Propel Economic Growth In Nigeria?," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 4(7), pages 298-306, July.
    • Handle: RePEc:bcp:journl:v:4:y:2020:i:7:p:298-306
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    References listed on IDEAS

    as
    1. Alexander Klemm & Stefan Parys, 2012. "Empirical evidence on the effects of tax incentives," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(3), pages 393-423, June.
    2. Browning, Edgar K, 1976. "The Marginal Cost of Public Funds," Journal of Political Economy, University of Chicago Press, vol. 84(2), pages 283-298, April.
    3. Barry W. Poulson & Jules Gordon Kaplan, 2008. "State Income Taxes and Economic Growth," Cato Journal, Cato Journal, Cato Institute, vol. 28(1), pages 53-71, Winter.
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