An Investigation on the Influence of Taxation on Economic Growth in Nigeria

Adegbite Adejare

Academic Journal of Economic Studies, 2020, vol. 6, issue 2, 12-20

Abstract: This study examined taxation effects on economic growth in Nigeria. It also verified the causal direction amid economic growth and taxation engaging Johansen co-integration and the Granger causality tests method to analyse data collected from CBN statistical bulletin from 1970 to 2018. Results divulged that petroleum profit tax (PPTAX), company income tax (CORPT), and Value added tax (VATAX) have positive significant influence on GDP but Custom and Excise duties (CUSEXCD), has short run and long run positive insignificant influence on GDP. Taxation had causal nexus with GDP in Nigeria because VATAX, CUSEXCD, CORPT and PPTAX, jointly triggered GDP. Conclusively, taxation had short run and long run positive significant influence on economic growth in Nigeria. Also, bi-causality nexus existed amid Taxation and economic growth which translated that the existence of taxation income ignited economic growth in Nigeria, and economic growth also triggered taxation. It is postulated that government should lay much emphasis on the judicious utilization of cash inflow of taxation efficiently on economic growth so as to buttress the essence of fulfilling the civil responsibility by the taxpayers.

Keywords: PPTAX; CORPT; VATAX; GDP; CUSEXCD (search for similar items in EconPapers)
JEL-codes: H24 H25 O40 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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