The Level of Development of Basic Infrastructure as a Factor in Stimulating Tax Revenue Growth in Nigeria

Taxation is an essential facet of governmental operations that must be supported by basic infrastructure in order to be efficient and successful. The government has had trouble generating adequate tax income in order to carry out fundamental social duties, particularly in rising economies such as Nigeria. The study examines the level at which the existing basic infrastructure is able to boost tax revenue growth in Nigeria. Due to the existence of a long-standing association in the series used for the current research, the contribution of basic infrastructure development to strengthening tax revenue collection efforts is examined from 1993 to 2022 using econometric methods in the form of Autoregressive Distributed Lag (ARDL) co-integration method and Error Correction Model. The findings divulge that infrastructure development in education has a negative impression on tax strength in the long run but has a huge satisfactory influence on tax effort in the near term. Furthermore, information and telecommunication facilities are both substantial and positive in both the long and short term, whereas transport and road network are considerably beneficial in the long run but intangible in the near run. However, in the short run, amenities at healthcare centers, financial services, and insurance become statistically disadvantageous and insignificant. The inquiry made several suggestions, including upgrading the country’s healthcare facilities, developing an efficient finance and insurance system, and building roads and transit networks. Finally, the tax authority should be dedicated to regularly expanding taxpayers’ education and understanding of all tax legislations and subsequent modifications in the country’s tax policies.