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Impact of Tax Reforms on the Liquidity of Nigerian Stock Market (1982-2021)

Author

Listed:
  • Usman O. A.

    (Department of Economics,Ladoke Akintola University of Technology, Oyo State, Nigeria.)

  • Adeoye M. A.

    (Department of Accounting,Faculty of Management Sciences, Ladoke Akintola University of Technology, Oyo State, Nigeria.)

  • Alimi A. A

    (Department of Accounting,Faculty of Management Sciences, Ladoke Akintola University of Technology,)

Abstract

This study examined the impact of tax reforms on the liquidity of Nigerian stock market. Secondary data were used for this study. The relevant data were sourced from Securities and Exchange Commission Statistics and Federal Inland Revenue Service Statistics Report between 1982 and 2021. Vector Auto Regressive (VAR) Model comprising Impulse Response Function (IRF) and Variance Decomposition (VD) was used to analyze the determinants and the liquidity of the stock market. The results of the VAR Model showed that the stock market liquidity (proxied by turnover ratio) significantly responded to changes in the movement of the tax reform indicators and positive both in the short and long run. This study concluded that a positive relationship exists between tax reforms and stock market liquidity. It was recommended that the regulatory body of tax administration must intensify efforts to mitigate the impacts of the global financial crisis on the Nigerian Exchange Group.

Suggested Citation

  • Usman O. A. & Adeoye M. A. & Alimi A. A, 2023. "Impact of Tax Reforms on the Liquidity of Nigerian Stock Market (1982-2021)," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(2), pages 607-617, February.
    • Handle: RePEc:bcp:journl:v:7:y:2023:i:2:p:607-617
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    References listed on IDEAS

    as
    1. Bassey Okon Ebi & Oluwafemi Ayodele, 2017. "Tax Reforms and Tax Yield in Nigeria," International Journal of Economics and Financial Issues, Econjournals, vol. 7(3), pages 768-778.
    2. Moses Kinyanjui Muriithi & Eliud Dismas Moyi, 2003. "Tax reforms and revenue mobilization in Kenya," Working Papers 131, African Economic Research Consortium, Research Department.
    3. Mr. Anthony J. Pellechio & Mr. Vito Tanzi, 1995. "The Reform of Tax Administration," IMF Working Papers 1995/022, International Monetary Fund.
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