Non-Oil Tax Revenue and Infrastructural Development in Nigeria

Jerry Oziegbe David () and Omoyemi Itua Perpetual
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Jerry Oziegbe David: Benson Idahosa University, Department of Accounting, Benin City, Nigeria
Omoyemi Itua Perpetual: Benson Idahosa University, Department of Accounting, Benin City, Nigeria

Central European Economic Journal, 2024, vol. 11, issue 58, 200-213

Abstract: In Nigeria, there has been a decline in oil revenue. This has impacted negatively on infrastructural development. This paper seeks to examine the effect of non-oil revenue as an alternative source of revenue for infrastructural development. The research design of the study was the ex post facto research design. The source of data was the secondary source and a time series of data from 1981 to 2021 was used in carrying out the research. The Autoregressive Distributed Lagged (ARDL) bounds test was used to determine the long-run and short-run relationship between the dependent and independent variables. It was observed that the variables are co-integrated, and as such, a long-run and short-run relationship exists among the explanatory variables. Furthermore, the ARDL short-run estimation result shows that the non-oil tax variables (proxied by VAT, CUSTD, and CIT) have a positive and significant effect on infrastructural development (proxied by total electricity production measured in Gigawatt hours (GWh) in Nigeria. In tandem, the ARDL long-run estimation results reveal that value-added tax, customs duties, and company income tax have a positive and significant impact on infrastructural development in Nigeria. Hence, an increase in the non-oil tax revenue base will boost infrastructural development in Nigeria in the long run. This finding is in tandem with the ARDL short-run estimation result. Therefore, it is inferred that Nigeria can experience infrastructural development when genuine commitment is made to explore an increase in non-oil revenue generation instead of being over-dependent on oil revenue.

Keywords: Autoregressive Distributive Lag; Non-Oil Tax Revenue; Infrastructural Development (search for similar items in EconPapers)
JEL-codes: H2 H27 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:ceuecj:v:11:y:2024:i:58:p:200-213:n:14

DOI: 10.2478/ceej-2024-0014

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