Analysis of the Impact of Taxation on A Nation’s Citizenry: The Implications of Maximizing Tax Revenue Under Nigeria’s Extant Paradigm

Rex Oforitse ARUOFOR; Ph.D  Daniel Risiagbon OGBEIDE; Ph.D

doi:10.56201/ijefm.v9.no9.2024.pg14.31

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Analysis of the Impact of Taxation on A Nation’s Citizenry: The Implications of Maximizing Tax Revenue Under Nigeria’s Extant Paradigm

Rex Oforitse ARUOFOR, Ph.D Daniel Risiagbon OGBEIDE, Ph.D

Abstract

This article is an anticipation of the 2024 tax reform proposals currently before the National Assembly which according to Vanguard newspaper represent a pivotal moment in Nigeria’s fiscal evolution. Given the benefits of taxes, it is notable that analysis of the Nigerian economy revealed that tax revenue had been declining over the recent years. This among other things may have informed why the President Bola Tinubu administration has decided to embark on a new taxation reform policy aimed at maximizing tax revenue in Nigeria in the main. An optimal tax revenue policy that will be consistent with the proposed 2024 tax bill was formulated and solved using linear goal programming. The result of this study will enhance the analytic skills of the National legislators, refocus the Executive and brighten the chances of the accruable benefits to the Nigerian citizens. The impact of such an optimal taxation policy on the Nigerian economy as a whole was determined, in order to analyze the implications and consequences under the existing state of the economy a’la the total differential systems modeling and analysis approach (ecostatometrics). The result indicated that if Nigeria can improve her tax administration and remove all vestiges of corruption from the economy, especially among tax collectors and increase investment by N2.04 trillion, it will be possible to collect an optimal tax revenue of N3.16 trillion per annum and this will impact positively on the Nigerian citizenry but may not provide the desired quantum leap to transform Nigeria’s fiscal landscape because the impact on poverty and corruption will be very profound except Government intervenes positively to alleviate poverty especially among the extremely poor in addition to investing and transforming the economic landscape of the country as a whole. Amongst other recommendations, government should ensure that the basic qualities of good taxation, including fairness and tr

Keywords

TaxationNigerian economyNigerian citizenryTax AdministratorsCorruption

References

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Analysis of the Impact of Taxation on A Nation’s Citizenry: The Implications of Maximizing Tax Revenue Under Nigeria’s Extant Paradigm

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