Impact of Tax Revenue on The Economic Performance of Nigeria

This paper examined the impact of tax revenue on the Nigerian economy for the period 2008- 2023. Secondary data used for the analysis were obtained from Central Bank of Nigeria (CBN) Statistical Bulletin and Federal Inland Revenue Service (FIRS) annual reports. The data included growth in gross domestic product (GDP) which was proxy for economic performance and five tax revenue variables, namely, petroleum profit tax (PPT), company income tax (CIT), value-added tax (VAT), education tax (EDT) and personal income tax (PIT) as explanatory variables. The study employed a multiple regression model and analyzed with the ordinary least squares technique. The results show that company income tax (CIT), value-added tax (VAT) and personal income tax exhibited positive and significant impact on the Nigerian economy. Petroleum profit tax (PPT) had positive though insignificant impact, while education tax (EDT) had significant negative impact on the Nigerian economy. The findings of this study have provided empirical evidence that tax revenue has significantly impacted the Nigerian economy as demonstrated by three of the tax revenue variables. The policy implication of these findings is that more attention be directed at ensuring that all taxes are efficiently collected and properly deployed to sectors of the economy where they can be used to provide basic infrastructure which will go a long way to foster economic growth and development. To this end, an efficient information system to capture all eligible tax payers should be put in place to enhance the level of tax administration and compliance.