Tax Revenue & Economic Growth in Nigeria: Moderating Effect of Finance Act

Amusan Gabriel Bola, and Ojemuyide Victor Oladayo
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Amusan Gabriel Bola,: Department of Accountancy, Redeemer’s College of Technology and Management, Redemption City of God, Mowe, Ogun State, Nigeria,
Ojemuyide Victor Oladayo: Universitatea Babes-Bolyai din Cluj-Napoca, Romania.

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 5, 1082-1093

Abstract: Tax revenue contributes significantly to economic growth, often reflected in the Gross Domestic Product (GDP) in developed economies. However, this trend has not been equally evident in Nigeria due to suboptimal tax policy implementation. This study evaluates the impact of tax revenue on economic growth in Nigeria and examines the moderating effect of the Finance Act. The Finance Act, implemented annually since 2019, introduced significant amendments to various tax provisions. Utilizing an ex post facto research design, the study employs quarterly data from 2016Q1 to 2023Q4, analyzed using descriptive statistics, unit root tests, co-integration analysis, and estimation techniques such as DOLS and FMOLS. Results show a significant positive relationship between tax revenue and GDP, both directly and with the moderating influence of the Finance Act. The study recommends policy reforms targeting sector-specific impacts and calls for a broader tax base to improve GDP growth.

Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:bcp:journl:v:9:y:2025:issue-5:p:1082-1093

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