Tax Revenue and Its Effect on Government Expenditure in Nigeria

Abstract

The research work examined tax revenue and its effect on government expenditure in Nigeria. Secondary data source was explored in presenting the facts of the situation. The secondary data were obtained from relevant literatures, Central Bank of Nigeria Statistical Bulletin and National Bureau of Statistics publications among other. Data were tested using the Ordinary Least Square Linear Regression model. From the Central Bank of Nigeria Statistical Bulletin and National Bureau of Statistics, information concerning Total Expenditure, Petroleum Profit Tax, Value Added Tax, Company Income Tax and Personal Income Tax in Nigeria were extracted. The findings show that tax revenue has significant effect on government expenditure in Nigeria. The study concluded that Increase tax revenue is a function of effective enforcement strategy which is the pure responsibility of tax administrators and Tax administration requires highly trained personnel to match up with the sophistication of tax evasion with the use of modern technology.  The study then recommends among others, that a carefully planned tax policy which is consciously and faithfully implemented can help to generate revenue that can transform a nation in totality.