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Does Taxation Has Impact On Investment? An Empirical Response From Co-Integration Analysis

Author

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  • ADEGBITE, Tajudeen Adejare

    (Department of Accounting, Al-Hikmah University)

Abstract

This study examined the effect of taxation on investment in Nigeria from 1970 to 2018. Relevant secondary data were obtained from Central Bank of Nigeria (CBN) Statistical Bulletins and Federal Inland Revenue Services Bulletin from 1970 to 2018. Regression analysis technique, Units root test, Johansen co-integration, Vector Error-Correction Model, and Granger causality tests were employed to determine the long run relationship and causality links among the variables. Results showed that PPT and Value added tax had positive significant impact on INV both in the short run and in the long run while Company income tax, and Custom and Excise duties impacted INV negatively. It is concluded that all components of taxes had positive significant impact on investment in Nigeria except corporate income tax. Corporate income tax had negative significant impact on investment both in the short run and in the long run

Suggested Citation

  • ADEGBITE, Tajudeen Adejare, 2019. "Does Taxation Has Impact On Investment? An Empirical Response From Co-Integration Analysis," Annals of Spiru Haret University, Economic Series, Universitatea Spiru Haret, vol. 19(4), pages 57-74.
    • Handle: RePEc:ris:sphecs:0315
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    References listed on IDEAS

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    1. Arnold C. Harberger, 1962. "The Incidence of the Corporation Income Tax," Journal of Political Economy, University of Chicago Press, vol. 70(3), pages 215-215.
    2. Mehmet Serkan Tosun & Sohrab Abizadeh, 2005. "Economic growth and tax components: an analysis of tax changes in OECD," Applied Economics, Taylor & Francis Journals, vol. 37(19), pages 2251-2263.
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    Cited by:

    1. Onyema, Chukwuemeka Collins & Ojo-Agbodu Ayodele. A. Ph & Adebayo M. Adeniyi PhD, 2024. "Tax Collection Techniques and Revenue Generation in Lagos State, Nigeria – A Study of Lagos State Board of Internal Revenue Services," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(2), pages 713-727, February.

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    More about this item

    Keywords

    taxation; investment; co-integration analysis; corporate income tax;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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