Authors :
Azuka Chinonso Success; Danjuma Sadiq Abubakar; Kanno Ruth Nkemjika; Mohammad Umar Farouq; Mathias Joseph Eriki; Oluwafunke Victoria Daramola; Oladokun Deborah Olajumoke
Volume/Issue :
Volume 9 - 2024, Issue 5 - May
Google Scholar :
https://tinyurl.com/23fk59z9
Scribd :
https://tinyurl.com/4tsu2xum
DOI :
https://doi.org/10.38124/ijisrt/IJISRT24MAY1091
Note : A published paper may take 4-5 working days from the publication date to appear in PlumX Metrics, Semantic Scholar, and ResearchGate.
Abstract :
This study looks at how taxes affect Nigeria's
economic development. A time series dataset from 1996
to 2021 was estimated using a short run Autoregressive
Distributed Lag [ARDL(2,1,0,0,0)]. The dataset was
collected from FIRS. The impacts of Value Added Tax
(VAT), Company Income Tax (CIT), Personal Income
Tax (PIT), and Petroleum Profit Tax (PPT) on Nigeria's
Gross Domestic Product were particularly examined in
this study. The findings showed that while personal
income tax and value added tax have a short-term
negative impact on economic growth, corporation
income had a considerable beneficial impact on Nigeria's
economic expansion. In addition, petroleum profit tax
has positive but insignificant effect on economic growth
in the long run. Therefore, striking the right balance
between tax rates, economic incentives and compliance is
crucial. The Laffer curve theory provides valuable
insights into finding the optimal tax rate that maximizes
revenue. This can be done balancing the incentives for
economic activity against the burden of taxation, finding
the optimal rate varies depending on various economic
factors and the taxpayer behaviour. The study suggests
that offering targeted tax incentive for investments,
innovation, and entrepreneurship. These incentives can
include tax breaks for specific sectors, research and
development activities, and job creation initiatives.
Keywords :
Economic Growth, Taxation, Tax Systems, Revenue, Sustainable Development
References :
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This study looks at how taxes affect Nigeria's
economic development. A time series dataset from 1996
to 2021 was estimated using a short run Autoregressive
Distributed Lag [ARDL(2,1,0,0,0)]. The dataset was
collected from FIRS. The impacts of Value Added Tax
(VAT), Company Income Tax (CIT), Personal Income
Tax (PIT), and Petroleum Profit Tax (PPT) on Nigeria's
Gross Domestic Product were particularly examined in
this study. The findings showed that while personal
income tax and value added tax have a short-term
negative impact on economic growth, corporation
income had a considerable beneficial impact on Nigeria's
economic expansion. In addition, petroleum profit tax
has positive but insignificant effect on economic growth
in the long run. Therefore, striking the right balance
between tax rates, economic incentives and compliance is
crucial. The Laffer curve theory provides valuable
insights into finding the optimal tax rate that maximizes
revenue. This can be done balancing the incentives for
economic activity against the burden of taxation, finding
the optimal rate varies depending on various economic
factors and the taxpayer behaviour. The study suggests
that offering targeted tax incentive for investments,
innovation, and entrepreneurship. These incentives can
include tax breaks for specific sectors, research and
development activities, and job creation initiatives.
Keywords :
Economic Growth, Taxation, Tax Systems, Revenue, Sustainable Development