Tax Revenue and Economic Growth in Nigeria
- Post by: airjournals
- January 30, 2026
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Nwadibe, Chinyere Loveth1, Ozoilo, Ifeoma Vivian2, & Nwabuisi, Anthony Okorie3
1-3Department of Accountancy, Enugu State University of Science and Technology, Enugu
ABSTRACT
This study examines the effect of tax revenues, specifically Company Income Tax (CIT), Value Added Tax (VAT), and Petroleum Profit Tax (PPT), on economic growth measured by poverty headcount ratio (PHR) in Nigeria. The research adopts an ex-post facto design, utilizing secondary data from 1991 to 2024. Multiple regression analysis was employed to assess the impact of each tax revenue source on the PHR. The findings reveal that CIT and PPT do not significantly affect the poverty headcount ratio, while VAT has a significant but negative effect on poverty reduction. This suggests that although VAT generates substantial revenue, it may be exacerbating poverty due to its regressive nature. The study recommends a review of the tax policies, particularly CIT and PPT, to enhance their impact on poverty reduction. There is a need for reforms that ensure these tax revenues are effectively utilized in poverty alleviation programs. Additionally, the government should consider measures to mitigate the regressive effects of VAT on low-income households, such as reducing the VAT rate on essential goods or implementing targeted social safety nets. This research contributes to the existing body of knowledge by providing empirical evidence on the relationship between tax revenues and poverty in Nigeria. It highlights the need for a more equitable tax system that not only generates revenue but also contributes to poverty reduction. The study’s findings are crucial for policymakers aiming to design tax policies that promote inclusive economic growth and reduce poverty in Nigeria.
Keywords: Tax Revenue; Company Income Tax (CIT); Value Added Tax (VAT); Petroleum Profit Tax (PPT); Poverty Headcount Ratio (PHR); Economic Growth; Economic Development
Nwadibe, C. L., Ozoilo, I. V., & Nwabuisi, A. O. (2026). Tax Revenue and Economic Growth in Nigeria. International Journal of Advanced Finance and Accounting, 7(1), 1-15 https://doi.org/10.5281/zenodo.18434884