Impact of Tax Reforms on the Liquidity of Nigerian Stock Market (1982-2021)

Usman O. A., Adeoye M. A. and Alimi A. A
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Usman O. A.: Department of Economics,Ladoke Akintola University of Technology, Oyo State, Nigeria.
Adeoye M. A.: Department of Accounting,Faculty of Management Sciences, Ladoke Akintola University of Technology, Oyo State, Nigeria.
Alimi A. A: Department of Accounting,Faculty of Management Sciences, Ladoke Akintola University of Technology,

International Journal of Research and Innovation in Social Science, 2023, vol. 7, issue 2, 607-617

Abstract: This study examined the impact of tax reforms on the liquidity of Nigerian stock market. Secondary data were used for this study. The relevant data were sourced from Securities and Exchange Commission Statistics and Federal Inland Revenue Service Statistics Report between 1982 and 2021. Vector Auto Regressive (VAR) Model comprising Impulse Response Function (IRF) and Variance Decomposition (VD) was used to analyze the determinants and the liquidity of the stock market. The results of the VAR Model showed that the stock market liquidity (proxied by turnover ratio) significantly responded to changes in the movement of the tax reform indicators and positive both in the short and long run. This study concluded that a positive relationship exists between tax reforms and stock market liquidity. It was recommended that the regulatory body of tax administration must intensify efforts to mitigate the impacts of the global financial crisis on the Nigerian Exchange Group.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:bcp:journl:v:7:y:2023:i:2:p:607-617

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