TAX REVENUE AS A VEHICLE FOR MACROECONOMIC PERFORMANCE IN NIGERIA

Abstract

This study examined tax revenue and macroeconomics performance in Nigeria. And the objectives were to examine the influence of value added tax (VAT) on gross domestic product growth (GDPR), employment generation (EMPR) and inflation (INF) in Nigeria. The ex-post facto research design was employed and secondary data was sourced from the Nigerian economy for twenty-one years (2000-2020) from the reports of the Central Bank of Nigeria statistical bulletin, the National Bureau of Statistics and the Federal Inland Revenue Service. The Pearson correlation coefficient and multiple regressions analysis were utilized with the aid of Stata12 software. Also, the Tado-Yamamoto causality test was applied to determine the direction of influence among the variables in the model. The study revealed a significant relationship between values added tax, VAT GDPR. The study revealed an insignificant relationship between value added tax and inflation in Nigeria. The research work recommended that Government should design a suitable framework (Tax incentives and allowances) that will encourage innovative economic activities for the manufacturing of goods/ commodities with international comparative advantage. This will increase employment generation and improve standard of living for Nigerians. The Policy makers should sustain the digitalization of the tax administration processes to make it user friendly and to curb incidences of corrupt practices. The system for VAT exemptions and refunds  and the indiscriminate issuance of tax holidays/ and other tax incentives to corporate bodies (particularly ill-designed tax exemptions that fail to attract the quantum of desired investments and attendant benefits to the State) should be reviewed to curb corrupt practices, improve revenue and employment generation in Nigeria.