IIARD International Institute of Academic Research and Development

Journal of Business and African Economy (JBAE )

E-ISSN 2545-5281
P-ISSN 2695-2238
VOL. 10 NO. 4 2024
DOI: 10.56201/jbae.v10.no4.2024.pg130.145

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Impact of Federal Government Taxes on Nigeria Economic Growth

Ogbonna Lilian, Azubike Joseph U.B., Okezie, Stella O.

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Abstract

The study focused on impact of federal government taxes on Nigeria economic growth. In achieving the objectives of the study, ex-post facto research design was adopted. The source of data for this work is secondary data through the use of CBN statistical bulletin and Federal Inland Revenue bulletin. Data collected were analyzed using descriptive statistics, unit root and Auto- Regression Distribution Lag (ARDL). The findings revealed that federal government taxes (PPT, CIT, VAT and CED) have no significant impact on change in gross domestic product in Nigeria. The findings also revealed that federal government taxes (PPT, CIT, VAT and CED) have no significant impact on change in foreign direct investment in Nigeria. The findings further revealed that federal government taxes (PPT, CIT, VAT and CED) have no significant impact on change in per capital income in Nigeria. Based on the findings, the study recommends Nigeria government should put policies in place that will foster the continual growth in tax revenue from custom and excise duty, personal income tax, company income tax and value added tax which are progressive in nature. This can be achieved through proper implementation of policies that improve the mechanisms for generating these tax revenues. If imports are discouraged through lower company income tax and higher custom duties, this will improve local production and increase economic growth through upscale of gross domestic product. Also, Nigeria government should set a custom and excise duty rates that are favorable to investors who are willing to carry out investment that encourages local production.

keywords:

Federal government taxes, Petroleum Profit Tax, Company Income Tax, Value Added

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