Tax Revenue and Sustainable Development in Nigeria: A Disaggregated Analysis

Abstract

Lately, Nigerians are in confusion on the rationale of paying tax due to the inability of the government to let taxpayers feel the impact of paying tax. These unethical practices have made some Nigerians want to evade tax wholly or partially. All and sundry still limbo in doubt as to whether the tax could ever be flexible or efficient; and if yes, can they deliver the sustainable growth that has eluded Nigeria for decades. This study investigates the impact of tax components in achieving sustainable growth in Nigeria using time series data from 1987-2019 using the ARDL bound testing approach to cointegration to ascertain the long run and the speed of adjustment (Short run) in analyzing the relationship. The result revealed that Petroleum Profit Tax, Company Tax, Value Added Tax and Personal Income Tax have a positive short-run relationship with economic growth (GDP) while Custom and Excise Duties and Personal Income Tax exhibits a negative relationship in the short and long run. This study hereby recommends strong institutional reforms in the department of customs to plug the manifest leakages in other to enable the revenue generated from the unit to reach the desired point to facilitate sustainable development in Nigeria by the year 2030.