ANALYSIS OF THE IMPACT OF TAX REVENUE ON ECONOMIC GROWTH IN NIGERIA

The aim of this study was to examine the analysis of impact of tax on economic growth in Nigeria from 1990 to 2017. The study used time series data for the analysis. The model adopted in the study is Multiple regression models and some other econometric techniques such as unit root test, Cointegration and Granger Causality were used in analyzing the data. The empirical findings from the study showed that tax revenue particularly personal income tax and Value added tax had insignificant impact on GDP (proxy for national income), physical capital formation and human capital development in Nigeria during the period under review. The study therefore recommended that government should improve its tax revenue mechanism that will impact positively on government expenditure such as infrastructural amenities provision across the country. There is also needfor government to reduce the rate of tax particularly personal income tax to enhance the growth of education and skill of entrepreneurs within the country. Specific socio-welfare interventions of government should also be put in place to encourage voluntary compliance to tax obligations by both individual and corporate Nigerians. There is a need for increased citizens ‘ awareness in terms of their tax obligation and civic responsibilities. Strategies should be adopted to improve on the system of tax administration to increase tax revenue generation in Nigeria.