Macroeconomic Determinants of Tax Revenue in Nigeria (1970-2011)
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Date
2013
Authors
Saibu, Olufemi Muibi
Olatunbosun, Sinbo O.
Journal Title
Journal ISSN
Volume Title
Publisher
World Applied Sciences Journal
Abstract
The Nigerian government in recent has engaged in search for the appropriate policy strategy to
stimulate tax revenue and boost the revenue profile of the government. This paper therefore attempts to examine
the most relevant macroeconomic policy variable that can serve as an anchor variable for achieving such policy
objective. The paper uses secondary data from Nigeria economy for the period 1970 to 2011 and adopted the
error correction mechanism to establish both the long run and short run relationships among the variables.
The main finding of the empirical analysis is that tax revenue tends be significantly responsive to changes in
income level, exchange rate and inflation rate. The income elasticity of tax shows that a unit percent increase
in income level will probably lead tax revenue increase by 0.63% in the immediate and 0.33% in the second year.
The evidence is in consonance with findings from previous studies in this area, especially [1, 2]. The paper
concludes that macroeconomic instability and level of economic activities are the main drivers of tax buoyancy
and tax effort in Nigeria
Description
Keywords
Tax Efforts Tax buoyancy Economic Growth Macroeconomic Instability Fiscal Policy
Citation
Saibu M.O and Olatunbosun O.S (2013) Macroeconomic Determinants of Tax Revenue In Nigeria (1970-2011) World Applied Sciences Journal 28 (1): Pp 27-35