Journal of
Accounting and Taxation

  • Abbreviation: J. Account. Taxation
  • Language: English
  • ISSN: 2141-6664
  • DOI: 10.5897/JAT
  • Start Year: 2009
  • Published Articles: 209

Article in Press


Mamidu Aruna Ishola

  •  Received: 15 July 2016
  •  Accepted: 19 October 2016
To finance the expenditure side of the budget, government just like individuals and firms needs revenue. Government receipts may include taxes, charges or borrowing. Various forms of taxes constitute major source of government revenue. This study investigated the effect of some forms of taxes on the growth of the Nigerian economy spanning from 1981 to 2013. The objective of the study is to examine the long run and short run effect of some selected form of taxes on the Nigerian economy. The study employed the ordinary least squares technique using the over parameterized approach. Findings revealed that in the long run, company income tax in both first and second lag periods have an inverse relationship with Gross Domestic Product of Nigeria though company income tax at the second period was significant in explaining systemic change in GDP. Further, personal income tax in the first period was significant in explaining changes in GDP, hence, in the three lagged periods personal income tax are directly related to GDP. Petroleum tax up to the third period showed an inverse relationship and insignificant in explaining changes in GDP. The short run result also revealed that company income tax at all lag period are inversely related to GDP as in the long run, personal income tax at all lag are directly related to GDP while petroleum tax was inversely related to GDP. The short run result showed that the model will return to equilibrium at the speed of 8 per cent. The study recommends an improved tax policy on personal and company income taxes and a more robust tax policy on petroleum tax.

Keywords: Nigeria Domestic Product, personal income tax, company tax, and petroleum tax.