Effect of Taxation on Nigeria’s Economic Growth

Abstract

In every economy, the important of revenue mobilization and allocation is key to economic growth process. This study seeks to examine the Effect of Taxation on Nigeria’s Economic Growth. The study adopts an ex-post factor research design, and by means t he Auto Regressive Distributed Lag Model (ARDL), which are standard least squares regressions that include lags of both the dependent variable and explanatory variables as repressors, the analysis are made. The study concludes that petroleum profits tax has a significant positive relationship with Gross Domestic Product and still has a long run relationship among them for the period covered in the study. It was also concluded that about 99% changes in the dependent variable are explained by the independent variable. This implies that the goodness of fit measured by the R2 is about 99%. It is therefore recommended that given the dwindling revenue from petroleum related sources, the government should embark on the strategic pursuit of broadening the economy to enhance economic growth and development.