Effect of Taxes on Per Capita Income in Nigeria

Adioha; Ndubuisi F; Mbaeri; Chibueze C; Obiah Mmadubuike E.

doi:10.56201/jafm.vol.12.no4.2026.pg297.309

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Effect of Taxes on Per Capita Income in Nigeria

Adioha, Ndubuisi F, ., Mbaeri, Chibueze C, ., Obiah Mmadubuike E.

Abstract

This study evaluated the effect of taxes on per capita income in Nigeria from 1994-2024. Time series data and quasi experimental research design were adopted. Secondary data were sourced from publications of United Nations Development Program , Central Bank of Nigeria Statistical Bulletin and Nigerian Federal Inland Revenue Service . Company income Tax , Petroleum Profit Tax , Customs and Excise Duties and Value Added Tax were employed as the explanatory variables. Per capita income is the only dependent variable. Descriptive statistics were utilized for the study variables while Autoregressive Distributed Lag model was used to test the hypothesis. The study found out that both Company income tax and Petroleum profit tax had significant positive effect on per capital income while Customs and excise duty and Value added tax had a significant negative effect on per capital income. Recommendations were made that: government through its regulatory authority should formulate policies that would encourage companies in Nigeria to operate at their best; ensure full implementation of the new petroleum industry act as it will provide answers to the improvement of petroleum profit tax; reduce corruption in the administration of customs and excise duty and value added tax by promoting policy transparency. Although a rich set of taxes were used in this study, the taxes set employed is not exhaustive, therefore, future research using some other tax variables would provide more information about Per capita income. Further studies would also consider capital gain tax, stamp duties, personal income tax and other state collected taxes in Nigeria in order to obtain a better insight about the effect taxes on Per capita income.

References

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Effect of Taxes on Per Capita Income in Nigeria

Abstract

References

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