IDEAS home Printed from https://ideas.repec.org/a/bcp/journl/v5y2021i11p331-341.html

Finance Act 2020 and Stability of Nigerian Banks

Author

Listed:
  • Clement Adewole, PhD

    (Department of Banking and Finance University of Jos, Nigeria)

  • John Damak

    (Department of Banking and Finance University of Jos, Nigeria)

  • Victor Odumu

    (Department of Banking and Finance University of Jos, Nigeria)

Abstract

The health of financial institutions in Nigeria at any point in time revolves around the policies enacted by regulatory authorities. Furthermore, other factors that militate against ability of the regulatory authorities are political interference, instability, corruption and inconsistent monetary and fiscal policies. Interestingly, Nigeria introduced the Tax and Fiscal Law amendments bill (The Finance Act 2020) to address obsolete tax laws and align these laws with global best practices. This study did an appraisal of the implication of the Finance Act 2020 on the stability of banks in Nigeria. The study adopted a descriptive research design, a nonprobability judgment sample of 127 participants who are employees of 5 deposit money banks in Jos, the Plateau state capital. These bank employees responded to a re-validated 5 points Likert scale questionnaire. Data were analysed using quantitative techniques of spearman ranking correlation with aid of SPSSv25 to test the hypotheses. Results of statistical data analyses showed that CGTA Reform has significant effect on bank stability; CITA Reform has significant effect bank stability; and VATA Reform has significant effect on bank stability. The study concluded that a probable cause of the statistically significant positive relationships among the variables is the enormous potential benefits that comes with the reformed tax laws. The study recommended that some provisions of the Finance Act should be clear enough for individuals to understand tax laws, corporate taxes should be reduced to encourage corporate investment and then lastly it recommended that fiscal authorities should expand its VAT exempt list to include some services provided by banks in Nigeria which would ensure bank stability in Nigeria.

Suggested Citation

  • Clement Adewole, PhD & John Damak & Victor Odumu, 2021. "Finance Act 2020 and Stability of Nigerian Banks," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 5(11), pages 331-341, November.
    • Handle: RePEc:bcp:journl:v:5:y:2021:i:11:p:331-341
    as

    Download full text from publisher

    File URL: https://www.rsisinternational.org/journals/ijriss/Digital-Library/volume-5-issue-11/331-341.pdf
    Download Restriction: no
    File URL: https://www.rsisinternational.org/virtual-library/papers/finance-act-2020-and-stability-of-nigerian-banks/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Claudio Borio, 2014. "Monetary policy and financial stability: what role in prevention and recovery?," BIS Working Papers 440, Bank for International Settlements.
    2. Ozili, Peterson K, 2019. "Determinants of Banking Stability in Nigeria," MPRA Paper 94092, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dürmeier, Stefan, 2022. "A model of quantitative easing at the zero lower bound," BERG Working Paper Series 183, Bamberg University, Bamberg Economic Research Group.
    2. Gábor Dávid Kiss & Tamás Schuszter, 2015. "The Euro Crisis and Contagion among Central and Eastern European Currencies: Recommendations for Avoiding Lending in a Safe Haven Currency such as CHF," Prague Economic Papers, Prague University of Economics and Business, vol. 2015(6), pages 678-698.
    3. Blikstad, N. M. D. & Oliveira, G. C., 2018. "Instabilidade financeira na Eurozona e a crise dos títulos públicos dos GIIPS," Revista Economia e Sociedade, Instituto de Economia, Universidade Estadual de Campinas (UNICAMP), vol. 27, August.
    4. José Mauricio Gil León, 2015. "Relación entre política monetaria y estabilidad financiera: un análisis aplicado para Colombia," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 33(77), pages 133-148, June.
    5. Filip, Bogdan Florin, 2014. "Financial-Monetary Instability Factors within the Framework of the Recent Crisis in Romania," Working Papers of National Institute for Economic Research 141213, Institutul National de Cercetari Economice (INCE).
    6. Šević, Aleksandar & Brawn, Derek, 2015. "Do demographic changes matter? A cross-country perspective," Journal of Multinational Financial Management, Elsevier, vol. 30(C), pages 36-61.
    7. Bruzda, Joanna, 2019. "Complex analytic wavelets in the measurement of macroeconomic risks," The North American Journal of Economics and Finance, Elsevier, vol. 50(C).
    8. Ampudia, Miguel & Lo Duca, Marco & Farkas, Mátyás & Perez-Quiros, Gabriel & Pirovano, Mara & Rünstler, Gerhard & Tereanu, Eugen, 2021. "On the effectiveness of macroprudential policy," Working Paper Series 2559, European Central Bank.
    9. Zoë Venter, 2020. "The Interaction Between Conventional Monetary Policy and Financial Stability: Chile, Colombia, Japan, Portugal and the UK," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 62(3), pages 521-554, September.
    10. Carlo D'Ippoliti & Maria Chiara Malaguti & Alessandro Roncaglia, 2020. "LÕUnione Europea e lÕeuro: crescere o perire," Moneta e Credito, Economia civile, vol. 73(291), pages 183-205.
    11. Myvel Nabil, 2024. "Evaluating the Effect of Climate Risk on Financial Fragility in Arab Countries," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 16(12), pages 104-104, December.
    12. Leroi RAPUTSOANE, 2015. "The lean versus clean debate and monetary policy in South Africa," Journal of Economics and Political Economy, KSP Journals, vol. 2(4), pages 467-480, December.
    13. Claudio Borio, 2021. "Back to the Future: Intellectual Challenges for Monetary Policy," Economic Papers, The Economic Society of Australia, vol. 40(4), pages 273-287, December.
    14. Krug, Sebastian, 2018. "The interaction between monetary and macroprudential policy: Should central banks 'lean against the wind' to foster macro-financial stability?," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy, vol. 12, pages 1-69.
    15. Dong, Yan & Wang, Cong, 2021. "The effect of stimulus policy on lending behavior and bank risk: Evidence from the Chinese banking sector," Emerging Markets Review, Elsevier, vol. 49(C).
    16. Fratzscher, Marcel & Grosse-Steffen, Christoph & Rieth, Malte, 2020. "Inflation targeting as a shock absorber," Journal of International Economics, Elsevier, vol. 123(C).
    17. Bihari, Péter, 2019. "Szempontok a jegybank mandátumának újragondolásához [Perspectives for a review of the central bank mandate]," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(12), pages 1241-1256.
    18. Saumya Ranjan Dash & Debasish Maitra & Byomakesh Debata & Jitendra Mahakud, 2021. "Economic policy uncertainty and stock market liquidity: Evidence from G7 countries," International Review of Finance, International Review of Finance Ltd., vol. 21(2), pages 611-626, June.
    19. Alan Blinder & Michael Ehrmann & Jakob de Haan & David-Jan Jansen, 2017. "Necessity as the mother of invention: monetary policy after the crisis," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 32(92), pages 707-755.
    20. Floro, Danvee & van Roye, Björn, 2017. "Threshold effects of financial stress on monetary policy rules: A panel data analysis," International Review of Economics & Finance, Elsevier, vol. 51(C), pages 599-620.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:5:y:2021:i:11:p:331-341. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.