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Tax revenue and private domestic investment: Evidence from Nigeria

Author

Listed:
  • Richard Umeokwobi

    (Department of Economics, University of Port Harcourt, Nigeria)

  • Emeka Nkoro

    (Department of Economics, University of Port Harcourt, Nigeria)

Abstract

This paper investigated the impact of tax revenue on private domestic investment in Nigeria from 1980 to 2018 using the modified ordinary least squares- Autoregressive distributed lag (ARDL). The paper used oil revenue, non-oil revenue, and Corporate Income Tax (CIT) as the independent variables while Private Domestic Investment (PDI) is the dependent variable. Oil revenue and non-oil revenue were used as a proxy for oil and non-oil tax. These data were obtained from secondary sources- central Bank of Nigeria, World Bank database and Federal Inland Revenue service statistical bulletin. The result showed that a long-run relationship exists between the aforementioned variables. Also, the paper revealed that oil and non-oil do not have a significant impact on PDI but CIT has a positive and significant impact on PDI. The paper recommends that proper measures/reforms should be put in place in order to reduce the impact of tax on private domestic investment in Nigeria.

Suggested Citation

  • Richard Umeokwobi & Emeka Nkoro, 2019. "Tax revenue and private domestic investment: Evidence from Nigeria," Bussecon Review of Finance & Banking (2687-2501), Bussecon International, vol. 1(2), pages 25-32, October.
  • Handle: RePEc:adi:bsrfbs:v:1:y:2019:i:2:p:25-32
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