IIARD International Institute of Academic Research and Development

IIARD International Journal of Economics and Business Management (IJEBM )

E-ISSN 2489-0065
P-ISSN 2695-186X
VOL. 3 NO. 2 2017

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Taxation and Its Influence on Household Consumption; The Nigerian Experience

Ajibola, Joseph Olusegun, (Ph.D) and Olowolaju Philip Segun, (Ph.D)

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Abstract

The research work examined taxation and its influence on household consumption; the Nigerian experience (1994-2014). Secondary data sourced from CBN Statistical Bulletin was used for analysis in this study. The operational variables for this research work were household consumption being the independent variable and taxation being the dependent variable. Ordinary Least Squares regression (OLS) was used in analyzing the relevant data via the use of E-View software. The OLS findings revealed that the household consumption was influenced by inflation rate negatively (?1= -92699.41), company income tax positively (?2= 6.015058) and value added tax positively (?3= 10.47610). It is therefore recommended that the government should ensure that inflation is managed and kept at its minimum so as to increase household consumption. Also, the government should implement and maintain an effective and efficient taxation system to increase revenue, so the government can provide the essentials for the economy needed for production.

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