EFFECT OF TAX REVENUE ON OPERATIONAL FRAMEWORK IN NIGERIA

Abstract

This study examined the effect of tax revenue on operational framework in Nigeria. Company income tax (CIT), Value added tax (VAT), Petroleum Profit tax (PPT) and Custom duties tax were used as to proxy revenue, while capital expenditure was used to measure operational/economic framework for a period of ten year spanning from 2014-2024. Based on the objectives of the study, four hypotheses were formulated. Ex-post facto research design was adopted. The time series data were obtained from Federal Ministry of Finance, Federal Inland Revenue Services, Central Bank of Nigeria, National Bureau of Statistics and the World Bank Publications. As a preliminary step in testing, the study employed the Augmented Dickey Fully Unit root test to confirm the order of integration of the time series variables. The study employed descriptive statistics and inferential statistics using Pearson correlation and Ordinary least Square (OLS) regression analysis. The findings shows that Company income tax has a significant and positive effect on capital expenditure in Nigeria, Petroleum profit tax has a significant and positive effect on capital expenditure, Value added tax has a significant and positive effect on capital expenditure, Custom and excise duty has a significant and positive effect on capital expenditure of Nigeria at 5% level of significance respectively. It was therefore recommended that Government should put in place adequate measure to ensure that revenue generated from tax is effectively utilized to develop and grow the economy through proper operational framework.