EFFECT OF PERSONAL INCOME TAX ON REVENUE GENERATION IN NIGER STATE
Abstract
The study investigated the effect of personal income tax on revenue generation in Niger State, focusing on the period from 2013 to 2022. The study was anchored on the Benefit Received Theory, which posits that individuals should pay taxes in proportion to the benefits they receive from public services, the research employs an Ex-Post Facto design to analyze historical data on tax revenue and income tax rates. Utilizing secondary data from the National Bureau of Statistics, the study explores the influence of personal income tax on revenue through Ordinary Least Squares (OLS) regression analysis. The findings reveal that Pay-As-You-Earn (paye) significantly impacts revenue generation, while direct assessment contributes to revenue but to a lesser extent. Recommendations include enhancing payroll automation systems and enforcing stricter compliance to boost paye efficiency, as well as reforming direct assessment procedures through better taxpayer education and improved methodologies to increase its revenue potential. This analysis underscores the critical role of paye in Niger State’s revenue framework and suggests targeted improvements to optimize tax revenue
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