Effect Of Tax Policy Changes On Revenue Generation In Nigeria

Main Article Content

Inyang Ethel O , Otuagoma Florence , Jadi Maitala B , Nwafor Chidi Benson , Umagu Udemeobong B , Ekwe Mike C


This study is an empirical assessment of the effect of tax policy changes on the revenue generation in Nigeria. Specific changes and recent reforms on personal income taxes and company income taxes reforms are the focus of this study. Time series data was extracted from the statistical bulletin of the NBS, Federal Inland Revenue Service and Federal Ministry of Finance for the period 2004-2016. Both student t-test and multiple regression were used to analyse the data. The findings revealed a statistical significance in the overall model on both the t- test and the regression analyses. It was discovered that changes in total tax between periods has statistical significance, with significant values of 0.002 and 0.007 respectively. While a unit increase in PIT decreased tax revenue by -2.4% which is in consonant with the classical theory of marginal tax, underpinning the theoretical framework adopted in this study. The study concludes that poor policy formulation and implementation including lack of anti- tax avoidance laws may be responsible for the high level of tax evasion which affects the Nigerian tax system. The study recommends a systematic approach to tax voluntary compliance strategy and deliberate effort by government in formulating tax policy that will guarantee voluntary compliance and efficient administration in line with macro-economic objectives of taxation.

Article Details