Faculty: Management Sciences
Department: Banking And Finance
Mojekwu K. Ogbonna
This study ascertained the effect of federal government tax revenue on the Nigerian economy. The motive behind the study is to contribute to the age long debate on taxation and to close the knowledge gap in literature on the effect of various tax revenue on the Nigerian economy. The general objective of the study is to ascertain the effect of federal government tax revenue on the Nigerian economy, and to specifically ascertain the effect of federal government tax revenue on gross domestic product, human development index and industrial production index. Data were sourced from the Central Bank of Nigeria Statistical Bulletin, United Nations Development Programme and Federal Inland Revenue Services: 1992-2016. Multiple regression was used in analyzing the data. The time series data were checked for unit root and diagnosed of serial correlation, heteroskedasticity, normality text and multicollinearity. The data were subjected to Johansen Co- Integration and Granger Causality test. The analysis performed revealed that tax revenue has insignificant effect on gross domestic product, human development index and index of industrial production. Thus the study recommends among others that government should improve on its tax collection rate and increase its spending on education and infrastructure in order to broaden the tax base. Also, tax revenue should be transparently and judiciously utilized for investment and in the provision of infrastructure and public goods and services so as to accelerate economic growth, development, employment and wealth creation. Government should also introduce net wealth tax on wealthy individuals and re-evaluate tax incentives in the country.