CORPORATE INCOME TAX AND ECONOMIC PERFORMANCE IN NIGERIA (2001-2022)

Abstract

The study examined effect of corporate income tax on Nigerian economic performance for the period 2001 to 2022. What informed the research was perennial challenges in corporate entities resistance to tax compliance through tax evasion, tax avoidance and
corrupt practices in collusion with revenue authorities. The study specifically investigated on effect of Education Tax, Company Income Tax and Petroleum Profit Tax on the Nigerian economic performance using the Human Development Index as proxy for economic
performance. Ex-post facto research design was employed to examine how the independent variables Company Income Tax (CIT), Education Tax (EDT), Petroleum Profit Tax (PPT) affected the dependent variable Human Development Index. Secondary data were sourced online from the websites of Federal Inland Revenue Service, UNDP statistical update and CBN bulletin. Vector Error Correction Model was employed to analyse the relationship between the dependent variable and the explanatory variables of the study. Results revealed that Tertiary Education Tax and Company Income Tax had significant effect on the Human Development Index while Petroleum Profit Tax did not. The research recommends that tax authorities should revisit their tax administrative policies by devising procedures to capture all registered companies in the tax net and ensure timely collection of their taxes. Also given the dwindling
revenue from petroleum-related sources, activities of petroleum corporations should be promoted in such a way that its tax incentives will boast its performance on tax revenue for economic performance.