Impact of Tax Reforms on Economic Growth in Nigeria

Abstract

The study investigated the impact of tax reform on economic growth of Nigeria from 1991 to 2016, using 2004 as a bench mark point. The year 2004 was used as the bench mark year given that the reforms undertaken by the federal government touched all facet of tax system and administration. Data used for the analysis of this study were obtained from annual bulletin published by the Central Bank of Nigeria CBN from 1991 to 2016 and data obtained Federal Inland Revenue Service FIRS on demand. The study employed linear regression and the test hypotheses formulated were carried out using chow test. The research found out the following: PPT has positive but insignificant impact on GDP of Nigeria before and after the 2004 tax reform, CIT has significant positive impact on GDP of Nigeria before and after the 2004 tax reform, VAT has positive but insignificantly impacted on the GDP of Nigeria following the 2004 tax reform, EDT has significant and positive impact on GDP of Nigeria before and after the 2004 tax reform, and CONS has positively but insignificantly impacted on the GDP of Nigeria following the 2004 tax reform.  The research concludes that 2004 tax reform has warranted only a mixed result on the gross domestic product such that while some tax measures showed insignificant relations some other measures of tax show that significant relationship with time.