Wellspring University Journal of Social and Management Sciences

EFFECT OF TAX REBATE ON ECONOMIC GROWTH IN NIGERIA

MBA, A., EYISI, A. S., OKAFOR, V. I.

June 16, 2026

Citation

Wellspring University Journal of Social and Management Sciences , Vol. 5 (2) (2026) , pp. 101-117

Details

ISSN: 2616-1296
Published: June 16, 2026
Status: Published

Abstract

This study investigates the effect of tax rebates on economic growth in Nigeria. Specifically, it examines
the effects of corporate income tax incentives, capital allowance incentives, customs duty incentives,
and excise tax incentives on economic growth. An ex-post facto research design was adopted to
establish the causal relationship between tax rebates and economic growth. Secondary data covering
the period from 2004 to 2023 were obtained from the Central Bank of Nigeria (CBN) Statistical
Bulletin, Federal Inland Revenue Service (FIRS), and National Bureau of Statistics (NBS). The data
were analyzed using the Ordinary Least Squares (OLS) regression technique to determine the effects
of the selected tax incentives on economic growth. The findings indicate that corporate income tax
incentives, capital allowance incentives, customs duty incentives, and excise tax incentives each have
a statistically significant positive effect on economic growth at the 5% level of significance. The study
therefore concludes that tax rebates constitute an important fiscal policy instrument for stimulating
economic growth in Nigeria. By reducing tax burdens and encouraging investment, production, and
business expansion, tax incentives can contribute to improved economic performance. The study
recommends that the Nigerian government establish clear, transparent, and accessible criteria for
granting tax rebates. Such criteria should minimize ambiguity, reduce administrative barriers, and
ensure that eligible businesses can effectively access available tax incentives. 