Tax Revenue on Government Budget Implementation in Nigeria: A Historical Evidence from the Year 1999-2023

Abstract

<ns3:p>Background The study specifically sought to determine the effects of company income tax proceeds, petroleum profit tax proceeds, and value-added tax proceeds on government budget implementation proxies by government total expenditure in Nigeria. Methodology An ex-post facto research design was adopted for this study, thereby making it possible to collect time series data from annual statistical bulletins of both the Central Bank of Nigeria and Federal Inland Revenue Service over a period spanning twenty-five years (1999 – 2023). Descriptive statistics were used by this study to describe individual characteristics associated with model variables. In addition, Ordinary Least Squares (OLS) Regression Analysis was also utilized so as to empirically estimate relationships existing between those components of tax revenues applied here and levels attained concerning implementations related thereto within budgets at a five percent significance level. The results of the OLS multiple regression analysis showed that company income tax proceeds, petroleum profit tax proceeds, and value-added tax proceeds have a significant effect on government budget implementation in Nigeria. It also depicts that tax revenue has not significantly contributed to the government's total spending for the years reviewed. Conclusions Findings from this study indicate that Tax Revenues (TR), Company Income Tax (CIT), Petroleum Profit Tax (PPT), and Value Added Tax (VAT) play a decisive role in financing government projects. Recommendations The government should transparently and prudently account for the revenue realized through taxation by using the same to develop other sectors of the economy, such as solid minerals and agriculture, which would go a long way toward improving the well-being of the citizenry.</ns3:p>