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Corporate Taxes and Industrial Output Nexus: Evidence from Nigeria: 1986 – 2023

Solomon Olubunmi, PhD

Abstract

This research paper investigates the relationship between corporate taxes and industrial output in Nigeria from 1986 to 2023.It employs a comprehensive econometric analysis to examine how variations in corporate tax rates influence industrial production levels within the country. Utilizing a time series dataset, the study identifies trends and patterns in industrial output in relation to changes in tax policy, providing insights into the effectiveness of Nigeria's corporate tax framework. The findings reveal that coefficient of company income tax (CIT) has a positive (0.28) insignificant impact on IDO while the coefficient of petroleum profit tax (PPT) has a positive (32.33) significant impact on IDO; the coefficient of value added tax (VAT) has a positive (1.28) insignificantly impact on IDO; the coefficient of exchange rate (EXCH) has negative (-1.60) significant impact on IDO; while the coefficient of inflation rate (INF) has a negative (-0.43) insignificant impact on IDO. This analysis contributes to the broader discourse on fiscal policy and economic development in emerging markets, particularly in the context of Nigeria's unique economic landscape. The study recommends that A renewed commitment by the government to review it tax policies with reference to company income tax by cutting it to a reasonable percentage to save as incentives for industries to increase their output for the growth and development of Nigeria.

Keywords

Corporate TaxIndustrial OutputNigeria

References

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