Impact Assessment of Taxes and Government Capital Expenditures on Nigeria's Economic Growth.

This study looked at how taxes and government capital expenditures affected Nigeria's economic growth. Secondary time series data from 1992 to 2021 make up the data set used in this investigation. The Granger Causality Test Result and Autoregressive Distributed Lag Model (ARDL) were employed in the study to describe the relationship's direction. According to the findings, the percentage of changes in the dependent variable that can be accounted for by the independent variables is indicated by the coefficient of determination (R2). Economic growth may be described by changes in the explanatory variables as shown by the model, according to the R2 of 0.614087, or 61%. The dummy variable accounts for 49% of the explanation.

The model is significant at 5%, according to the F-statistic, which suggest the model's overall importance. The F-statistics and its probability (4.177050 and 0.004027, respectively) support this. Therefore, the study comes to the conclusion that taxes and government capital expenditures significantly contribute to Nigeria's economic growth. As a deterrence to others, this study suggests, among other things, that the government impose a death penalty on people who divert funds from the petroleum profit tax and misappropriate government capital expenditures.

Taxation, Government, Capital Expenditure, Econometrics and Economic Development.

1. Abata, M. A (2014). The impact of tax revenue on Nigerian economy (Case of federal board of inland revenue), Journal of Policy and Development Studies, 9(1), 1-14 [Google Scholar] [Crossref]

2. Abiahu,T.H. and Amahalu, U.T. (2017). Value Added Tax and Economic Growth of Nigeria. [Google Scholar] [Crossref]

3. European Journal of Humanities and Social Sciences, 10(1): 180-189. [Google Scholar] [Crossref]

4. Adaramola, S.K &Ayeni-Agbaje, T.M., (2015). The tax structure and economic growth in Nigeria: A disaggregated empirical evidence. International Research Journal of Finance and Economics, 54, 125-135. [Google Scholar] [Crossref]

5. Adebosin, W. G; Toriola, A. K; Salami, L. A; Akingbade, V. T. & Ajayi, F. O. (2021). The Nexus between Taxation, Government Expenditure and Economic Growth in Nigeria (1981 to 2016). Lapai Journal of Economics;5(1), 133-143. Online ISSN: 2659-0271. [Google Scholar] [Crossref]

6. Adejare, A. T. & Akande, S. S. (2017). The impact of personal income tax on government expenditure in Oyo State. Account and Financial Management Journal, 2(4), 635-643 doi: 10.18535/afmj/v2i4.02 [Google Scholar] [Crossref]

7. Ajakaiye, T. J. (2014). The Impact of Tax Accounting on Economic Development of Nigeria: Collection and Remittance Perspective. Scholarly Journal of Business Administration, 4 (3) 60-66. [Google Scholar] [Crossref]

8. Amahalu, L. M. & Ezechukwu, N. (2017). Causal Relationship between Trade Openness and Government Size: Evidence from Saudi Arabia. The Journal of Economic and Legal Researches, 5 (6), 110-124. [Google Scholar] [Crossref]

9. Akpan, K. (2015). The Nexus between the Nigerian Tax on Government Capital Expenditure And Economic Growth. International Research Journal of Finance and Economics,54,125-135. [Google Scholar] [Crossref]

10. Al-Fawwaz., T. M (2016) The Impact of Government Expenditures on Economic Growth in Jordan (1980-2013), International Business Research, 9(1), 1-16 [Google Scholar] [Crossref]

11. Al-Yousif, M. H. (2017). An Empirical Study on the Causality between Economic Growth and Taxation in Nigeria. Current Research Journal of Economic Theory, 4 (2), 29-38. [Google Scholar] [Crossref]

12. Appah, E. & J.K. Oyandonghan I. (2011) The challenges of tax mobilization and Management in the Nigerian Economy, Journal of Business Administration Management, 6(2), 128-136. [Google Scholar] [Crossref]

13. Ayuba, A. J. (2014). The Welfare and Economic Performance. National Tax Journal,48,171-198. [Google Scholar] [Crossref]

14. Bakare, A. S. & Olubokun, S. (2015). Health Care Expenditure and Economic Growth in Nigeria: An Empirical Study. Journal of Emerging Trends in Economics and Management Sciences,2 (2): 83-87. [Google Scholar] [Crossref]

15. Bingxin, E. R., Shenggen, T. U. & Anuja, A. (2016). The Impact of Taxation On Capital Expenditure and Economic Growth in China. Current Research Journal of Economic Theory, 4 (2), 29-38. [Google Scholar] [Crossref]

16. Bojanic, A. N (2013). The composition of government expenditures and economic growth in Bolivia, Latin American Journal of Economics, 50(1), 83–105. [Google Scholar] [Crossref]

17. Brown, C. V. & Jackson, P. M., (2016). Public Sector Economics.4th Ed.UK: Blackwell Publishers Ltd, Nigerian Economic Society. [Google Scholar] [Crossref]

18. Chaido, D. & Melina, D. (2012). Government expenditure and national income: Causality test fortwelve new members of European Union. The Romanian Economic Journal 13 (38),27-34. [Google Scholar] [Crossref]

19. Chandana, A. Adamu, J. & Musa, A. (2021). Impact of Government Expenditure on Economic Growth in Nigeria, 1970-2019. CBN Journal of Applied Statistics, 12(1), 139-174. [Google Scholar] [Crossref]

20. Craig, A.O., Adetola, R., & Maminu, K.A. (2020). Tax revenue and capital expenditure in Nigeria. [Google Scholar] [Crossref]

21. Accounting and Taxation Review, 4(1): 132-147. [Google Scholar] [Crossref]

22. Edame, G. E & Eturoma, A. D (2014). The determinants of public expenditure on educational infrastructural facilities and economic growth in Nigeria, E3. Journal of Business [Google Scholar] [Crossref]

23. Management and Economics, 5(6), 152-161 [Google Scholar] [Crossref]

24. Edame, G. E. & Okoi, W. W. (2014)) Government Expenditure and Economic Growth in Nigeria: A Disaggregated Approach. Economic and Financial Review, 43 (1), 112-121. [Google Scholar] [Crossref]

25. Efuntade, A. O; Efuntade, O. O. & Akinola, A. O. (2020). Capital Expenditure and the Impact of Taxation on Economic Growth in Nigeria. The International Journal of Business Management and Technology, 4(5), 147-159. ISSN: 2581-3889 [Google Scholar] [Crossref]

26. Emmanuel, C. U. & Charles, A. (2015). The Impact of Taxation on the Nigerian Economy. International Research Journal of Finance and Economics, 54, 125-135. [Google Scholar] [Crossref]

27. Emori, D. O; Duke, A. I., & Nneji, H. A, (2015). The Impact of Taxation on Government Expenditure on The South African Economy. International Research Journal of Finance and Economics, 50(3): 25-52. [Google Scholar] [Crossref]

28. Eyisi, A. S., Oleka, C. D., & Bassey, B. E, (2015). The Effect of Taxation on Macroeconomic Performance in Nigeria. Journal of Economics, 54, 70-78. [Google Scholar] [Crossref]

29. Fagbemi, T.O., (2015). Effect of Tax Avoidance and Tax Evasion on Personal Income Tax in Nigeria. International Research Journal of Finance and Economics, 64, 23-32. [Google Scholar] [Crossref]

30. Folster, S. & Herekson, M., (2011). Growth Effects of Government Expenditure and Taxation in Rich Countries. European Economic Review, 45, 1501-1520. [Google Scholar] [Crossref]

31. Friedman, M. (1978). The limitations of tax limitation.Policy Review, 7-14. [Google Scholar] [Crossref]

32. Furceri, Z. & Karras, U. (2013). Oil Prices and Exchange Rate Volatility in Nigeria: An Empirical Investigation. Central Bank of Nigeria Economic and Financial Review, 48 (3), 31-48. [Google Scholar] [Crossref]

33. Ihenyen, C. J. &Mieseigha, E. G., (2014). Taxation as an Instrument of Economic growth (The Nigerian Perspective). Information and Knowledge Management, 4 (12): 49-53. [Google Scholar] [Crossref]

34. Iyidogan, P. V. & Turan, T. (2017). Government size and economic growth in Turkey: A Threshold regression analysis. Prague Economic Papers, Prague University of Economics and Business, 2017(2), 142-154. [Google Scholar] [Crossref]

35. Jibir, A., Abdullahi, S., Abdu, M., Buba, A., & Ibrahim, B. (2018). External debt-growth nexus in Nigeria revisited. Asian Economic and Financial Review, 8(1), 117-130. [Google Scholar] [Crossref]

36. Johansen, S. (1988). Statistical Analysis of Cointegration Vectors. Journal of Economics.3(2),23 56. [Google Scholar] [Crossref]

37. Johansen, S., & Juselius, K. (1990). Maximum likelihood estimation and inference on co- integration—with appucations to the demand for money. Oxford Bulletin of Eco- nomics and statistics, 52(2), 169-210. [Google Scholar] [Crossref]

38. Jiranyakul, K. & Brahmasrene, T. (2017). The Relationship between Government Expenditures and Economic Growth in Thailand. Journal of Economics and Economic Education Research, 8 (1): 93-102. [Google Scholar] [Crossref]

39. Levina, O. (2016). Government Expenditure and Economic Growth in Nigeria. Journal of Economic Management, 2 (1), 1-13 [Google Scholar] [Crossref]

40. Macek, M. (2014). The Impact of Taxation Revenue on Economic Growth in OECD Countries. [Google Scholar] [Crossref]

41. European Journal of Business and Management, 3 (9), 21-29. [Google Scholar] [Crossref]

42. Mudaki, J. S. & Masaviru, W. (2016). The Impact of Taxation on Education. European Journal of Business and Management, 3 (9), 03-16. [Google Scholar] [Crossref]

43. Mukur I. N. & Olugu, K. N., (2013). Increasing Size of Government: Implication for Output Growth in Nigeria. Atlanta, USA: Spelman College. [Google Scholar] [Crossref]

44. Musa, Y., & Asare, B. K. (2013). Long and short run relationship analysis of monetary and Fiscal policy on economic growth in Nigeria: A VEC model approach". Research Journal of Applied Sciences, Engineering and Technology, 5(10), 44-51. [Google Scholar] [Crossref]

45. Musgrave, R & Musgrave P. B (2004). PublicFinancein. Theory and Practice, 5th Edition, Tata Mcgraw HillEducation Private ltd, New Delhi. 627. [Google Scholar] [Crossref]

46. National Bureau of Statistics (2019). Labor Force Statistics - Volume I: Unemployment and Underemployment Report. Abuja: NBS [Google Scholar] [Crossref]

47. Ngerebo, T. A. & Masa, A., (2012). Government Expenditure and Economic Growth in Nigeria: A Disaggregated Analysis. Business and Economics Journal, 4, 1-11. [Google Scholar] [Crossref]

48. Nweze, P. N., & Greg, E. E. (2016). An empirical investigation of Oil revenue and economic growth in Nigeria. European Scientific Journal September, 12(25): 271-294. [Google Scholar] [Crossref]

49. Nwaeze, C. & Njoku, R. & Nwaeze, O. P. (2014). Impact of government expenditure on Nigeria’s economic growth (1992 – 2011). The Macrotheme Review 3(7), 1-14. [Google Scholar] [Crossref]

50. Nwaiwu, O. (2015). Tax Revenue and Economic Growth In Nigeria. European Journal of Business and Management, 3 (9): 3-16. [Google Scholar] [Crossref]

51. Oboh, C. S. & Isa, E. F. (2012). Tax Policy Reforms in Nigeria. Research Paper No. 2006/03 [Google Scholar] [Crossref]

52. United Nations University. World Institute for Development Economic Research. [Google Scholar] [Crossref]

53. Ofoegbu, O. E., Akwu, T. O. & Olive, T. I., (2016). The effects of tax revenue on economic development of Nigeria. Research Journal of Social Sciences, 4 (1): 12 – 22. [Google Scholar] [Crossref]

54. Ofoegbu, A., & Oliver, O. (2016). Empirical analysis of effect of tax revenue on economic development of Nigeria. International Journal of Asian Social Science.6(10), 604-613. [Google Scholar] [Crossref]

55. Ogbonna G. N., & Appah, E. (2016). Effect of Tax Administration and Revenue on Economic Growth in Nigeria. https://www.semanticscholar.org/paper. [Google Scholar] [Crossref]

56. Ogbonna, G., & Odoemelam, N. (2015). Impact of taxation on economic development of Nigeria: 2000-2013. Research Gate. https://www.researchgate.net/publicatio n/305333001 [Google Scholar] [Crossref]

57. Ojong, C. M., Ogar, A. & Oka, F. A. (2016). The impact of tax Revenue on economic growth: Evidence from Nigeria. IOSR Journal of Economcs and Finance, 7(1), 32-38 [Google Scholar] [Crossref]

58. Okoli M.N, Njoku C.O., & Kaka G.N (2014). Taxation and economic growth in Nigeria; A Granger causality approach. International Journal of Research in Management, Science & Technology, 2(3). [Google Scholar] [Crossref]

59. Okwara, C. C., & Amori, O. M. (2017). Impact of tax revenue on economic growth in Nigeria. International Journal of Scientific Research in Social Sciences & Management Studies, 2(2), 90-102. [Google Scholar] [Crossref]

60. Oladipupo, A. O. & Ibadin, P. O., (2015). The Relationship between Government Expenditures and Economic Growth in Thailand. Journal of Economics and Economic Education Research, 8 (1): 93-102. [Google Scholar] [Crossref]

61. Onakoya, O. & Afintinni, J. (2016). Effect of revenue and economic growth in Nigeria. [Google Scholar] [Crossref]

62. International Journal of Humanities and Social Sciences Invention, 23(19), 2319 -2322. [Google Scholar] [Crossref]

63. Onakoya, A.B., Afintinni, O. I. & Ogundajo. (2017). Taxation revenue and economic growth in Africa. Journal of Accounting and Taxation, 9(2), 11-22 [Google Scholar] [Crossref]

64. Otu, G. O. & Adejumo, T. O. (2013). The Effects of Tax Revenue and Economic Growth in Nigeria. International Journal of Humanities and Social Sciences Invention, 2(6),16-26. [Google Scholar] [Crossref]

65. Oziengbe, S. A. (2013). The relative impacts of federal capital and recurrent expenditures on Nigeria’s Economy. American Journal of Economics, 3(5), 210-221. [Google Scholar] [Crossref]

66. Salami, S. B., Amusa, A. B. & Ojoye O. O. (2018). Empirical analysis of the impact of non-oil revenue on economic growth: Nigerian experience. International Journal of Economics, Commerce and Management, United Kingdom, 6(6), 263-276. [Google Scholar] [Crossref]

67. Perron, P. (1989). The great crash, the oil price shock, and the unit root hypothesis. Econo-metrica, 57(6), 1361-1401 [Google Scholar] [Crossref]

68. Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289-326. [Google Scholar] [Crossref]

69. Phillips, P., & B. Hansen (1990).’Statistical Inference in Instrumental Variables Regression with I(1) Process. Review of Economic Studies, 57:99-125. [Google Scholar] [Crossref]

70. Phillips, P. & Perron, P. (1988). Testing for a unit root in time series regression. Biometrica 75(2), 335-346. [Google Scholar] [Crossref]

71. Poulson, B. & Kaplan, J., (2014). State Income Taxes and Economic Growth. Academy of Management Review, 28(1): 12-37. [Google Scholar] [Crossref]

72. Razzaq, A., Ahmed, F. & Razzaq, A. (2015). Dynamic Relationship between Income and Consumption: A Time Series Analysis of Spain, Management and Administrative Sciences Review, 4(2): 404-411 [Google Scholar] [Crossref]

73. Saidin, N. A. B., Basit, A. & Hamza, S. M. (2016) The role of tax on economic growth. [Google Scholar] [Crossref]

74. International Journal of Accounting & Business Management, 4(2) doi: 10.24924/ijabm/2016.11/v4.iss2/242.250. [Google Scholar] [Crossref]

75. Szarouska, E. (2016). The Impact of Tax on Government Capital Expenditure and Economic Growth in Nigeria. International Journal of Humanities and Social Sciences, 2(6), 16-26. Todaro, M. P. & Smith, S. C., (2006). Economic Development, 9th Edition. Pearson Educational Limited England. [Google Scholar] [Crossref]

76. Udoffia, D.T & Godson, J.R (2016) The impact of federal government expenditure on economic growth in Nigeria. Greener Journal of Social Sciences. 6(4), 092-105. [Google Scholar] [Crossref]

77. Udoka, C. O. & Anyingang, R. A. (2015). The effect of public expenditure on the growth and development of Nigerian economy. International Review of Management and Business Research, 4(3), 1-12. [Google Scholar] [Crossref]

78. Uremadu, S.O.,& Ndule, J.C. (2011) Doc “An evaluation of taxation as a mechanism of revenue Uwaezuoke, O.C., Nweke, I.M., & Ogar C.A. (2018). Effect of foreign direct investment ongovernment expenditure in a pre and post-Deregulation Period in Nigeria 1970-2016. [Google Scholar] [Crossref]

79. International Journal of Current Aspects in Finance (IJCAF), 4(2); 1- 10. [Google Scholar] [Crossref]

80. Veronika, B. & Lenka, J. (2014). Taxation of Corporations and their Impact on Economic Growth. [Google Scholar] [Crossref]

81. Journal of Management Science Review,161(16). [Google Scholar] [Crossref]

82. Wagner, A. (1883). Three Extracts on Public Finance”. Translated and reprinted in R.A. Musgrave and A.T. Peacock (eds), Classics in the Theory of Public Finance, London: Macmillan, 1958. [Google Scholar] [Crossref]

83. Wambai, U.S.K., & Hanga, B.Y. (2013) Taxation as an Instrument of Economic growth https://pdfs.semanticscholar.org. [Google Scholar] [Crossref]

84. Worlu, C. N. & Nkoro, E. (2012). Tax Revenue and Economic Development in Nigeria: A Macro econometric Approach. Academic Journal of Interdisciplinary Studies, 1(2), 221-223. [Google Scholar] [Crossref]

85. World Bank (2008). Public Expenditure Management Handbook. Washington, D.C.: The World Bank Group. [Google Scholar] [Crossref]

86. World Bank (2015). Introduction to Public Sector Governance and Accountability Series: Public Expenditure analysis. Washington, D.C.: The World Bank Group. [Google Scholar] [Crossref]

87. World Bank (2020). World Development Indicators. Washington, D.C.: The World Bank Group. [Google Scholar] [Crossref]

• Drone-Based Phenotyping and its Utilization in Crop Improvement: A Review
• An IoT-Enabled Smart Healthcare Monitoring System Using Machine Learning for Early Health Risk Prediction
• Strategic Integration of Artificial Intelligence for Achieving Operational Excellence in Container Freight Stations Using Evidence from Chennai, India
• Adoption of OTT platforms: Analyzing User Behavior through the UTAUT2 Model
• Customers’ Buying Behaviour in Relation to Online Food Delivery (Evidence from National Capital Region (NCR) of India)