FEDERAL TAX REVENUE ON GOVERNMENT EXPENDITURE IN NIGERIA
Abstract
This study aimed to further evaluate the relationship between federal tax revenue and government expenditure in Nigeria between the years 2009 to 2023. This research focused on VAT, PPT and CIT as proxies for federal government’s portion of tax revenue and analyzed their significance on capital expenditure. The study drew attention to the challenges attributed to Nigeria's low tax-to-GDP ratio, which limits revenue mobilization, therefore increasing borrowing. The study used time series data to compile data from Central bank statistical bulletin and Federal Inland Revenue Service between 2009 and 2023. Data gathered over the years were analyzed using descriptive statistics, unit root tests and co-integration tests and estimation using fully-modified ordinary least squares (FMOLS), canonical co-integrating regression (CCR) and dynamic ordinary least squares (DOLS). The study revealed that VAT had a positive and significant effect on CAPEX ( = 0.2301, p = 0.0057 < 0.01). It also showed that PPT had a positive and significant effect on CAPEX ( = 0.2301, p = 0.0057 < 0.01). Additionally, CIT was shown to have a positive but statistically insignificant effect on CAPEX ( = 0.3432, p = 0.1752 > 0.1). The study suggested possible fiscal reforms to improve tax collection, reduce overreliance of external borrowing, and promote economic development. The findings are expected to assist policymakers in formulating effective fiscal policies that improve government spending efficiency and promote public welfare
This article is available as a PDF download
Published in JOURNAL OF BUSINESS AND VALUE CREATION
ISSN: 2315 – 8212
This article appears in our peer-reviewed academic journal
View JournalRelated Articles
Explore similar research in our collection
WORKING CAPITAL MANAGEMENT AND FINANCIAL PERFORMANCE OF EMERGING ECONOMIES: EVIDENCE FROM NIGERIA
KAZEEM ALANI ZAKARIYAH, JANET TEMILADE MOGAJI, FATAI BUSAYO YEKEEN, MUIDEEN RAIFU
Jun 9, 2026
This study evaluated the influence of working capital management on financial performance of publicl...
View ArticleEFFECT OF DIGITAL TECHNOLOGIES ON PERFORMANCE OF SERVICE-BASED SMALL AND MEDIUM ENTERPRISES IN THE NORTH-EAST NIGERIA
FENBEYA, AYUBA, Dr. IBRAHIM MOHAMMED AWWAL, Prof. OBIOMA H. ONYEAGHALA
Jun 2, 2026
This study investigated the effect of digital technologies on performance of service-based SMEs in N...
View ArticleCASH MANAGEMENT STRATEGIES AND THE FINANCIAL PERFORMANCE OF COMMERCIAL BANKS LISTED IN NIGERIA
EBE, EMMANUEL CHUKWUMA, Ph.D, IROABUEKE, NKWACHUKWU PROMISE, UGO, CELINA AMAUCHECHUKWU, Ph.D
May 27, 2026
This study investigates how cash management strategies influence the financial performance of listed...
View Article