IMPACT OF FEDERAL TAX REVENUE ON GOVERNMENT EXPENDITURE IN NIGERIA
Keywords:
Federal tax revenue, company income tax, petroleum profit tax, capital expenditure, recurrent expenditure.Abstract
The purpose of this study is to examine the impact of federal tax revenue on government expenditure in Nigeria for the period of 2000-2024. The ex-post facto research design was adopted in this study in the course of generating the necessary data, which were collected from secondary sources such as the Central Bank of Nigeria Statistical Bulletin of various years. The data generated in this study were analysed with mean and standard deviation while the null hypotheses stated were tested at 5% level of significance using the ordinary least squares (OLS) regression technique. The findings from the study show that company income tax has a significant effect on government expenditure (capital and recurrent expenditure) and petroleum profit tax has a significant implication on capital expenditure but a non-significant relationship on recurrent expenditure. Based on the results of the study, the following recommendations were made: tax authorities ensure efficient collections of petroleum profit tax and reduce the loop holes for evasion. Also, there should be diversification of the revenue-base of the country such that oscillations in oil prices will not be able to significantly hamper government spending; government should focus on using company income tax (CIT) revenues for recurrent expenditures since it has an increasing effect. In this regards, avenues of CIT evasion by companies should be addressed and also the tax base should also be widened.
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