Tax Revenue and Economic Growth in Nigeria (2015–2023): An Empirical Analysis
Keywords:
Taxation
Abstract
Tax revenue is a critical tool for achieving economic development, as it provides governments with the resources needed to finance public goods and services. This study examines the impact of tax revenue components—Petroleum Profit Tax (PPT), Customs and Excise Duties (CED), and a composite index of Value Added Tax (VAT) and Corporate Income Tax (CIT)—on economic growth in Nigeria from 2015 to 2023. Using a quantitative research design, secondary data were analyzed through regression techniques to evaluate the relationship between tax revenue and Real GDP Growth. The results reveal that all examined tax components positively and significantly impact economic growth, with PPT contributing the most, followed by CED and the VAT_CIT composite index. The model explains 89.1% of the variance in Real GDP Growth, highlighting the robustness of the predictors. The findings emphasize the importance of efficient tax administration, diversification of revenue sources, and compliance culture in fostering sustainable economic growth. The study recommends strengthening non-oil revenue streams, enhancing digital tax systems, and addressing trade bottlenecks to maximize the impact of tax revenues on Nigeria's economic growth. These insights are relevant for policymakers seeking to improve fiscal performance and achieve long-term economic stability.
References
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Tanzi, V., & Zee, H. H. (2000). Tax policy for emerging markets: Developing countries. IMF Working Paper 00/35. International Monetary Fund. https://doi.org/10.5089/9781451845528.001
Uche, C., & Edeh, H. (2021). Oil price volatility and tax revenue in Nigeria. Energy Economics, 95, 105–116.
Uche, I., & Edeh, F. (2021). The impact of oil price volatility on government revenue in Nigeria. Nigerian Journal of Public Finance, 12(1), 24–39.
Adedeji, A., & Kolawole, O. (2022). Fiscal federalism and tax revenue generation in Nigeria. African Journal of Economic Policy, 29(1), 112–130.
Adedeji, M., & Kolawole, F. (2022). Fiscal federalism and tax revenue generation in Nigeria. African Tax Review, 21(1), 48–61.
Adegbite, O., & Olayemi, I. (2021). Tax administration and revenue mobilization in Nigeria: Post-reform perspectives. Journal of Finance and Development Studies, 18(4), 45–62.
Adegbite, T., & Olayemi, S. (2021). Tax revenue and GDP growth in Nigeria: An empirical study. African Journal of Economic Review, 9(1), 56–75.
Adeola, A., & Olatunji, B. (2020). Tax incentives and economic growth: A Nigerian perspective. Journal of Economic Policy Analysis, 12(3), 78–95.
Adeola, T., & Olatunji, O. (2020). Tax incentives and their impact on economic growth in Nigeria. African Tax Review, 15(3), 122–135.
Adesanya, O. A., & Anene, E. C. (2022). Tax revenue and economic growth in Nigeria: A bi-directional relationship. International Journal of Social Research Methodology, 25(3), 345–359.
Adewuyi, A. (2022). Revenue mobilization in oil-dependent economies: Lessons from Nigeria. African Economic Review, 30(2), 56–74.
Adewuyi, A. (2022). Tax reforms and economic growth: Evidence from Nigeria. Journal of Fiscal Studies, 14(2), 98–115.
Agunbiade, O., & Idebi, A. A. (2020). Tax revenue and economic growth nexus: Empirical evidence from the Nigerian economy. European Journal of Economic and Financial Research, 4(2), 18–41.
Ahmed, K., & Yusuf, M. (2020). Customs duties and their effect on economic growth in Nigeria. Nigerian Economic Journal, 25(1), 75–90.
Ahmed, S., & Yusuf, A. (2020). Customs duties and economic growth in Nigeria: An empirical analysis. Journal of Development Economics, 45(2), 89–105.
Barro, R. J. (1990). Government spending in a simple model of endogenous growth. Journal of Political Economy, 98(5, Part 2), S103-S125. https://doi.org/10.1086/261726
Bello, A. (2021). Property taxes and economic development in Nigeria. Urban Finance Review, 9(2), 45–63.
Bello, M. (2021). Property taxes and state-level economic development in Nigeria. Journal of Property Tax Assessment & Administration, 18(2), 45–60.
Eze, F., & Obi, K. (2021). Excise duties and economic stability in Nigeria. Journal of Development Economics, 18(2), 89–102.
Eze, P., & Obi, C. (2021). Excise duties and economic stability in Nigeria. International Journal of Economics and Financial Management, 6(4), 56–70.
Eze, P., & Obi, C. (2021). Excise duties and economic stability in Nigeria. International Journal of Economics and Financial Management, 6(4), 56–70.
Fayemi, J., & Adebanjo, A. (2021). Impact of digital tax reforms on revenue performance in Nigeria. Journal of Tax Administration, 7(1), 45–60.
Fayemi, O., & Adebanjo, A. (2021). Digital tax reforms and revenue performance in Nigeria. Journal of Fiscal Policy, 19(4), 55–68.
Federal Inland Revenue Service (FIRS). (2020). Annual Report: Strengthening tax administration through digital innovation. Abuja: FIRS Publications.
International Monetary Fund (IMF). (2023). Nigeria: Economic Outlook and Fiscal Analysis. Washington, DC: IMF.
Keen, M., & Slemrod, J. (2021). Rebellion, rascals, and revenue: Tax follies and wisdom through the ages. Princeton University Press.
Keen, M., & Slemrod, J. (2021). Tax reforms in Sub-Saharan Africa: Drivers of economic growth. World Development, 140, 105–215.
Keynes, J. M. (1936). The general theory of employment, interest, and money. Macmillan.
Laffer, A. B. (1981). Supply-side economics. Financial Analysts Journal, 37(5), 29-44. https://doi.org/10.2469/faj.v37.n5.29
Mankiw, N. G. (2015). Macroeconomics (9th ed.). Worth Publishers.
Musgrave, R. A., & Musgrave, P. B. (1989). Public finance in theory and practice (5th ed.). McGraw-Hill.
Nwachukwu, C., & Okon, E. (2021). Tax administration reforms and GDP growth in Nigeria. African Journal of Public Finance, 14(3), 77–94.
Nwachukwu, C., & Okon, J. (2021). Tax administration reforms and GDP growth in Nigeria. Nigerian Journal of Economic and Social Studies, 63(2), 215–232.
Nwosu, E., & Okafor, C. (2021). Company income tax and economic growth in Nigeria. International Journal of Economics and Business Research, 21(4), 345–360.
Nwosu, T., & Okafor, J. (2021). Company income tax and economic growth: Evidence from Nigeria. Journal of Corporate Finance, 16(2), 38–55.
Okoye, J., & Eze, F. (2020). The impact of VAT on Nigeria's GDP: A sectoral analysis. African Journal of Economic Policy, 15(2), 31–45.
Okoye, L., & Eze, N. (2020). VAT contributions to Nigeria’s economic growth. Journal of Economic Policy Reform, 23(2), 178–192.
Olawale, F., & Onyekachi, E. (2022). Tax revenue diversification in Nigeria: The role of non-oil taxes. Journal of Finance and Accounting, 10(3), 89–102.
Olawale, T., & Onyekachi, U. (2022). Challenges and prospects of tax diversification in Nigeria. African Journal of Economic Policy, 29(3), 101–120.
Omotayo, B. (2020). Tax compliance culture and its influence on economic growth in Nigeria. African Journal of Taxation, 11(1), 31–47.
Omotayo, O. (2020). Tax compliance culture and economic growth in Nigeria. Journal of Accounting and Taxation, 12(3), 123–137.
Osamor, I., Omoregbee, G., Ajasa-Adeoye, F., & Olumuyiwa-Loko, J. (2023). Tax revenue and economic growth: Empirical evidence from Nigeria. Journal of Economics and Behavioral Studies, 15(1), 15–26.
Romer, P. M. (1986). Increasing returns and long-run growth. Journal of Political Economy, 94(5), 1002-1037. https://doi.org/10.1086/261420
Smith, A. (1776). An inquiry into the nature and causes of the wealth of nations. W. Strahan and T. Cadell.
Tanzi, V., & Zee, H. H. (2000). Tax policy for emerging markets: Developing countries. IMF Working Paper 00/35. International Monetary Fund. https://doi.org/10.5089/9781451845528.001
Uche, C., & Edeh, H. (2021). Oil price volatility and tax revenue in Nigeria. Energy Economics, 95, 105–116.
Uche, I., & Edeh, F. (2021). The impact of oil price volatility on government revenue in Nigeria. Nigerian Journal of Public Finance, 12(1), 24–39.
Published
2025-06-16
How to Cite
CHIJUKA, I. M., & IZEKOR, A. O. (2025). Tax Revenue and Economic Growth in Nigeria (2015–2023): An Empirical Analysis. Global Journal of Accounting, 11(1), 36-48. Retrieved from https://gja.unilag.edu.ng/article/view/2620
Section
Articles
