CAN WE TAX OURSELVES OUT OF POVERTY? THE INTERACTION OF GOVERNANCE ON THE LINK BETWEEN TAX REVENUE AND SUSTAINABLE DEVELOPMENT IN NIGERIA
Abstract
Tax revenue provides a potent tool for governance and economic emancipation
of nations irrespective of region and level of development because of its nonvulnerability to external shocks like other natural resources income flows. This
study explored the moderating effect governance on the nexus between tax
revenue and sustainable development of Nigeria from 1996 to 2024. Anchoring
on fiscal social contract and institutional theories, explanatory research design
was deployed and secondary data was collected to effectively operationalize
the research variables. The autoregressive distributed lag method was utilized
as the appropriate estimation method after the pre-estimation tests. The
empirical results indicated that tax revenue only exhibited significant influence
on sustainable development at the introduction of governance indices.
However, both tax revenue and governance has significant and negative effects
on sustainable development of Nigeria. The study also found that governance
significantly and negatively moderates the effect of tax revenue on sustainable
development of Nigeria in the short run. Thus, the study called for urgent
government action on the basic elements of governance indicators identified by
the World Governance Indicator (WGI), as a necessity for Nigeria’s fiscal
revenue to effectively and positively contribute towards sustainable
development.
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Published in UNIPORT JOURNAL OF BUSINESS, ACCOUNTING & FINANCE MANAGEMENT
ISSN: 1596-9911
This article appears in our peer-reviewed academic journal
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