Effect of Tax Structure on Economic Growth in Nigeria

Ephraim Ita Ntekim; Akpet Okpa Edim; Ubuo Linus Mkpa; Ominokima Aniema Cyril

doi:10.56201/jafm.vol.12.no5.2026.p.69.76

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Effect of Tax Structure on Economic Growth in Nigeria

Ephraim Ita Ntekim, Akpet Okpa Edim, Ubuo Linus Mkpa, Ominokima Aniema Cyril,

Abstract

An effective tax system ought to satisfy the twin purposes of raising maximum revenue as well as encourage production. In the light of this, this study evaluates the effect of tax structure on economic growth in Nigeria using annual time series data from 2000-2024. The objective of the study was to establish the relationship between the components the tax system and economic growth in Nigeria ordinary least square regression model to establishment the relationship. The findings revealed that the tax system has no significant impact on economic growth in Nigeria because of the numerous challenges confronting the system. Further analysis of the components of the tax system shows that petroleum profit tax have more impact on economic growth in Nigeria than company income tax, value added tax and custom and excise duties. Consequently, the study recommended that it is necessary for the government to revisit and review tax laws and regulations that are hindrance to the performance of the tax system so as to block and discourage the loopholes that are being exploited by tax payers to either evade or avoid tax payments. Government should also ensure that tax revenue are transparently and judiciously utilized for investment and in the provision of infrastructure and public goods and services so as to accelerate economic growth, employment and wealth creation.

Keywords

Tax structureeconomic growthtax systempetroleum profit taxcompany income taxvalue added taxcustom and excise duties.

References

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Effect of Tax Structure on Economic Growth in Nigeria

Abstract

Keywords

References

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