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Taxation and Transportation: Granger Causality Approach in Nigeria

Author

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  • Adejare Adegbite Tajudeen

    (Department of Accounting, Al-Hikmah University, Ilorin, Kwara State, Nigeria)

Abstract

This study gauges taxation's effect on transportation from 1981 to 2019 in Nigeria. This study further assesses the bearing of causality among Transportation, Corporate tax, Petroleum profit tax, Value added tax and Custom and Excise duties. Analytical tools such as VECM, Johanson Test for Cointegration, Vector Autoregression and granger causality Wald (GCW) test are adopted for analysis. Diagnosis tests such as the Lagrange-multiplier test, Jarque-Bera test and Eigenvalue stability condition are carried out to examine autocorrelation, stability and normality tests respectively. Outcomes divulge that corporate tax has a positive short-run and long-run influence on transportation. Petroleum profit tax, Value added tax and Custom and Excise duties also impact transportation positively and significantly both in the long run and short run as deduced from empirical analysis. This reveals that all the components of taxation observed influence transportation positively both in the long run and short run in Nigeria. Conclusively, taxation impacts transportation positively and significantly both in the short run and long run. This translates that taxation income has been utilized effectively to upsurge transportation in Nigeria. It predicts that transportation will perform excellently in terms of economic development and employment generation if taxable income is properly monitored and utilized effectively.

Suggested Citation

  • Adejare Adegbite Tajudeen, 2021. "Taxation and Transportation: Granger Causality Approach in Nigeria," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 31(3), pages 1-20, September.
    • Handle: RePEc:vrs:suvges:v:31:y:2021:i:3:p:1-20:n:1
    DOI: 10.2478/sues-2021-0011
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    References listed on IDEAS

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    1. Vlad Cristina & Ibadula Birol & Brezeanu Petre, 2016. "How Taxes Can Contribute to The Implementation of The Public Governance Strategy? – An Analysis for Eastern European Countries," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 26(3), pages 18-32, September.
    2. Storchmann, K. -H., 2001. "The impact of fuel taxes on public transport -- an empirical assessment for Germany," Transport Policy, Elsevier, vol. 8(1), pages 19-28, January.
    3. BENSON MBONU OGBONNA & Kalu Ebi Uma, 2014. "Does Transportation Sector Have Any Impact On Economic Development? Nigeria In Focus," Proceedings of International Academic Conferences 0100855, International Institute of Social and Economic Sciences.
    4. Opreţ Laura-Anca & Turcaş Florin Marius & Dumiter Florin-Cornel & Brezeanu Petre, 2017. "Tax evasion between fraud and legality," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 27(4), pages 1-11, December.
    5. Ayeni, Oluwasegun David & Afolabi, Olarewaju Joseph, 2020. "Tax Revenue, Infrastructural Development and Economic Growth In Nigeria," MPRA Paper 99464, University Library of Munich, Germany, revised 2020.
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    More about this item

    Keywords

    Transportation; Granger Causality; Taxation; VAR; Dickey-Fuller Test;
    All these keywords.

    JEL classification:

    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General

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