ATTAINING SUSTAINABLE DEVELOPMENT IN NIGERIA: THE TAXATION EFFECTS
Keywords:
Company Income Tax, Custom and Excise duty, Petroleum Profit Tax, Sustainable development, Taxation, Value Added TaxAbstract
The aim of every government is to provide basic social amenities to its citizens and improve the standard of living of these citizens thereby leading to sustainable development. However, these cannot be achieved without adequate funding. In this regard coupled with declining oil price globally, attention of the government has been drawn to internally generated revenue. This study examined the effect of taxation on sustainable development in Nigeria. Specifically, the study ascertained how Petroleum Profit Tax, Company Income Tax, Value Added Tax, and Customs and excise duty as proxies for taxation affects Nigeria Human Development Index as proxy for Sustainable Development in Nigeria. Time series data for 24 years spanning from 2000 to 2023 were sourced from secondary sources including FIRS annual reports, CBN bulletin Word Bank Reports, and National bureau of statistics (NBS) reports. The study adopted ex-post facto research design, and the formulated hypotheses were tested using ordinary least square regression (OLS) at 5%. The results of the analysis revealed that all the variables have a joint significant influence on the Nigeria Human Development Index at 5% significant level. While specifically, Petroleum Profit Tax has a negative but non-significant effect on human development index of Nigeria with a p-value of 0.1191, Company Income Tax has a positive and significant effect on human development index of Nigeria with a p-value of 0.0041, Value Added Tax has a positive and significant effect on human development index of Nigeria with a p-value of 0.0000 while Customs and Excise Duties showed both a negative and non-significant effect on human development index of Nigeria with a p-value of 0.0711. The study therefore recommends amongst others that government through The Ministry of Finance and the Nigerian National Petroleum Corporation (NNPC) should prioritize the transparent and efficient allocation of petroleum revenues to critical sectors such as healthcare, education, and infrastructure, ensuring that oil revenues translate into tangible human development benefits. Also the Federal Inland Revenue Service (FIRS) should continue to strengthen corporate tax collection mechanisms while ensuring that revenues are directed towards development projects that enhance public services and infrastructure, further improving human development outcomes.
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