TAX REVENUE AND ECONOMIC DEVELOPMENT IN NIGERIA

The government of any nation holds significant responsibilities, many of which rely heavily on the revenue it generates from various sources, particularly taxation. Taxes, imposed on individuals and businesses, represent a critical means of funding government operations and driving economic development. Despite its importance, Nigeria faces challenges in optimizing tax revenue collection, which affects its capacity for sustainable economic growth. This study examined the relationship between tax revenue and economic development in Nigeria, focusing on the trends, and impacts of tax revenue collection from 2010 to 2023. The primary objectives were to analyze the trend in tax revenue collection, assess the impact of Company Income Tax (CIT) on Gross Domestic Product (GDP), examine the effect of Value Added Tax (VAT) on GDP, and determine the influence of Personal Income Tax (PIT) on GDP. The study adopted an ex-post facto research design, utilizing secondary data from the Federal Inland Revenue Service (FIRS), Central Bank of Nigeria (CBN), and National Bureau of Statistics (NBS) for the period of 2010 to 2023. Descriptive statistics, trend analysis, unit root tests, Johansen cointegration, and Vector Error Correction Model (VECM) were employed to analyze the data. Findings revealed a significant positive relationship between tax revenue and economic growth, with a 1% increase in CIT, VAT, and PIT contributing 0.756%, 0.812%, and 0.345% increases in GDP, respectively (P