FEDERALLY COLLECTABLE TAXES AND ECONOMIC GROWTH IN NIGERIA

This research investigates the impact of Federally collectable Taxes on the economic growth of Nigeria over a ten-year period (2015–2024). The study recognizes taxation as a vital fiscal tool for resource mobilization, infrastructure development, and socio-economic upliftment, especially in developing economies like Nigeria. Despite the significant revenue generated through various taxes—namely Petroleum Profit Tax, Company Income Tax, and Value Added Tax—Nigeria's economic growth has not proportionally reflected the expected developmental strides, indicating underlying issues in tax administration and compliance. Employing an ex-post facto research design, the study utilizes secondary data sourced from the Federal Inland Revenue Service (FIRS), State Revenue Services, the Central Bank of Nigeria, and the National Bureau of Statistics. The data encompass annual figures on tax revenues and Gross Domestic Product (GDP). The analytical framework involves multiple regression and correlation analysis, with the model specified as GDP = α + β₁PPT + β₂CIT + β₃VAT+µ, to evaluate the relationship between tax components and economic growth. The findings reveal a strong positive correlation between Federally collectable Taxes revenue and Nigeria’s GDP, with an R-squared value of approximately 78.5%, indicating that tax revenues significantly explain variations in economic growth. Specifically, the analysis demonstrates that increases in Petroleum Profit Tax, Company Income Tax, and Value Added Tax are associated with corresponding increases in GDP, with each tax type showing statistically significant impacts at varying levels. The residual analysis suggests a linear relationship between tax revenues and economic growth, reinforcing the importance of Impactive tax policies and administration. The study concludes that a robust and efficiently administered tax system is crucial for Nigeria’s economic development, emphasizing the need for reforms in tax collection, compliance, and transparency.