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Taxation and Nigerian Economy: an Empirical Analysis

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  • Amah, Cletus Okey

    (Department of Accounting, Faculty of Business Studies, Ignatius Ajuru University of Education, Rumuolumeni, Port Harcourt, Nigeria)

Abstract

The study was carried out to investigate the effect of Nigerian taxation system on Nigerian economy. The study anchored on benefit received theory of taxation as it theoretical framework. The study covered a period of 18 years (1999-2017). Time series data extracted from Central Bank of Nigeria Statistical Bulletin and Federal Inland Revenue Service for the various years was used for the study. Ordinary Least Square method of regression was adopted for data analysis. The independent variables are Value Added Tax (VAT), Petroleum Profit Tax (PPT), and Company Income Tax (CIT) while Gross Domestic Product (GDP) is the dependent variable. The regression result revealed that there is a significant positive relationship between the independent variables (PPT, CIT) and Gross Domestic Product. However the relationship between Value Added Tax and Gross Domestic Product is negative. It is recommended that government should provide enabling environment for companies to generate more revenues. Government should also reduce the VAT rate to encourage consumption of certain goods.

Suggested Citation

  • Amah, Cletus Okey, 2021. "Taxation and Nigerian Economy: an Empirical Analysis," International Journal of Management Science and Business Administration, Inovatus Services Ltd., vol. 7(4), pages 29-35, March.
    • Handle: RePEc:mgs:ijmsba:v:7:y:2021:i:4:p:29-35
    DOI: 10.18775/ijmsba.1849-5664-5419.2014.74.1004
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    References listed on IDEAS

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    1. Peter Egger & Christian Keuschnigg & Hannes Winner, 2008. "Incorporation and Taxation: Theory and Firm-level Evidence," University of St. Gallen Department of Economics working paper series 2008 2008-20, Department of Economics, University of St. Gallen.
    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.
    3. Dondena & CASE & IEB & PWC, 2017. "Literature review on taxation, entrepreneurship and collaborative economy," Taxation Papers 70, Directorate General Taxation and Customs Union, European Commission.
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    More about this item

    Keywords

    Value added tax; Gross domestic product; Petroleum profit tax; Company income tax.;
    All these keywords.

    JEL classification:

    • M00 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - General - - - General

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