EFFECT OF TAX REVENUE ON GROSS DOMESTIC PRODUCT IN NIGERIA

Abstract This research examines the effect of aggregate tax revenue on the economic growth of Nigeria between 1990 and 2021. The objective of the study was to investigate how total aggregate tax revenue, represented as TTR, affects Nigeria’s economic growth, represented as GDP. Secondary data were obtained from the Central Bank of Nigeria (CBN) bulletin. The selected variables were tax revenue (TTR) and Gross Domestic Product (GDP). The statistical tools used for analysis were linear regression and the Statistical Package for Social Sciences (SPSS), using the linear regression model as the analytical technique. The main objective was to determine whether changes in Nigeria’s aggregate tax revenue contribute to economic growth, represented as GDP. The findings indicated that tax revenue has a positive and significant impact on economic growth. It was therefore concluded that aggregate tax revenue is a viable fiscal tool for economic growth in Nigeria. However, if properly harnessed, it could serve as a major source of revenue for the country, particularly in funding government projects and programmes. The study recommends that the government and all agencies responsible for tax administration should improve their efforts in tax generation and management to enhance economic growth.