Does Taxation Drive Economic Development in Nigeria?

Etim Osim Etim, Nsima Johnson Umoffon and David Johnny Ekanem
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Etim Osim Etim: Department of Accounting, Faculty of Business Administration, University of Uyo, Nigeria
Nsima Johnson Umoffon: Department of Accounting, Faculty of Business Administration, University of Uyo, Nigeria
David Johnny Ekanem: Department of Accounting and Finance, Faculty of Social and Management Sciences, Ritman University, Ikot Ekpene, Nigeria

International Journal of Research and Scientific Innovation, 2020, vol. 7, issue 7, 129-137

Abstract: This study examined whether taxation drive economic development (Human Development Index) in Nigeria used data spanning from 1985 to 2018 obtained from the Central Bank of Nigeria (CBN) statistical Bulletin, Federal Inland Revenue Service (FIRS) tax reports and Human Development Report by United Nations Development Programme (UNDP) reports. Data collected were analysed using descriptive and inferential statistics involving multiple regression analysis. Findings revealed that an inverse and significant relationship exist between Company Income Tax (CIT) and Human Development Index (HDI) in Nigeria; direct and significant relationship between Value Added Tax (VAT) and HDI direct and insignificant relationship between Personal Income Tax (PIT), Petroleum Profit Tax (PPT) and HDI. It was concluded that taxation has the capacity to cause positive economic development in Nigeria if the tax base is expanded and loopholes in the tax administrative system which causes tax revenue hemorrhage are closed and the strengthen of taxation framework to make the Nigerian economy tax base economy rather than oil base economy.

Date: 2020
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