IDEAS home Printed from https://ideas.repec.org/a/dug/jaccma/y2021i2p14-30.html
   My bibliography  Save this article

Taxes and Income Inequality in Nigeria: Cointegration and Error Correction Mechanisms Evidence from 1980 – 2018

Author

Listed:
  • Omesi Israel

    (Ignatius Ajuru Univeristy of Education)

  • Appah Ebimobowei

    (Ignatius Ajuru Univeristy of Education)

Abstract

This study investigated the effects of taxes on income inequality in Nigeria for the period 1980 to 2018. The data for this research was obtained from the Central Bank of Nigeria, Federal Inland Revenue Service and National Bureau of Statistics. The data obtained were analysed using econometric methods such as augmented dickey fuller, cointegration and error correction mechanisms. The results revealed a significant negative relationship exists between personal income tax, company income tax and inequality; a negative but statistically insignificant relationship exist between value added tax and income inequality; a positive but statistically insignificant relationship exist between value added tax, government spending on education, government spending on health and income inequality. Hence the study concludes that taxes play a major role in income redistribution in Nigeria. The paper recommends amongst others that government should ensure compliance to tax payments because taxes provide a powerful policy tool effectively used for curing economic and social ills and should not to be set too high, as this would discourage investments and savings.

Suggested Citation

  • Omesi Israel & Appah Ebimobowei, 2021. "Taxes and Income Inequality in Nigeria: Cointegration and Error Correction Mechanisms Evidence from 1980 – 2018," The Journal of Accounting and Management, Danubius University of Galati, issue 2(11), pages 14-30, August.
    • Handle: RePEc:dug:jaccma:y:2021:i:2:p:14-30
    as

    Download full text from publisher

    File URL: https://dj.univ-danubius.ro/index.php/JAM/article/view/412/1387
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ireen Choga & Fiyinfoluwa Giwa, 2023. "The Effect of Property Tax on Income Redistribution in Selected African Countries," Sustainability, MDPI, vol. 15(7), pages 1-15, March.

    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:dug:jaccma:y:2021:i:2:p:14-30. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Florian Nuta (email available below). General contact details of provider: https://edirc.repec.org/data/fedanro.html .

    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.