IIARD International Institute of Academic Research and Development

Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 11 NO. 2 2025
DOI: 10.56201/jafm.vol.11.no2.2025.pg114.133

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Federal Government Taxes and Economic Growth in Nigeria

Igube, Paul Chukwuma, and, Okafor, MC

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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. 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 (border checks and tracking of goods produced within the country) 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 favourable to investors who are willing to carry out investment that encourages local production. This will go a long way to discourage custom and excise duty evasion, encourage foreign direct investment, increase local production, create employment and consequently lead to increase in the per capita income of Nigeria.

keywords:

Tax revenue, Petroleum Profit Tax, Company Income Tax, Value Added Tax, Custom

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