INDIRECT TAX REVENUE AND ECONOMIC DEVELOPMENT IN NIGERIA 1991-2023

Abstract

This study examined the relationship between indirect tax revenue and economic development in Nigeria over the period 1991–2023. Specifically, the study investigated the effect of value added tax (VAT) efficiency, import tax efficiency, and export tax efficiency on the Human Development Index (HDI) in Nigeria. The study adopted an ex-post facto research design and utilized secondary data obtained from the Central Bank of Nigeria Statistical Bulletin, National Bureau of Statistics, and World Bank database. Descriptive statistics and econometric techniques were employed for data analysis, while Ordinary Least Squares (OLS) multiple regression analysis was used to test the hypotheses. The findings revealed that VAT efficiency, import tax efficiency, and export tax efficiency jointly have a positive relationship with human development index in Nigeria. The result further indicated that increases in indirect tax efficiency contribute to improvements in economic development indicators. The study therefore concludes that indirect tax revenue plays a significant role in promoting economic development in Nigeria. Based on the findings, it was recommended that government should strengthen indirect tax administration, promote export-oriented policies, and ensure effective management and allocation of tax revenue to critical sectors of the economy to enhance sustainable economic development.