CHAPTER ONE: INTRODUCTION

1.1       Background to the Study……………………………………………………1

1.2       Statement of the Problem…………………………………………………...3

1.3       Objective of the Study………………………………………………………5

1.4       Research Questions…………………………………………………………5

1.5       Research Hypotheses……………………………………………………….5

1.6       Scope of the Study………………………………………………………….6

1.7       Significance of the Study…………………………………………………...6

1.8       Operational Definition of Terms……………………………………………7

CHAPTER TWO: LITERATURE REVIEW

2.1       Theoretical Framework……………………………………………………..8

2.1.1    Sociopolitical theory of Taxation…………………………………………...8

2.1.2    Expediency Theory………………………………………………………….9

2.1.3    Benefits-received Theory……………………………………………………10

2.1.4    Ability to Pay Theory………………………………………………………..10

2.2       Conceptual Review………………………………………………………….11

2.2.1    Concept of Tax and Nature of Taxation…………………………………….11

2.2.2    Objectives of Taxation………………………………………………………14

2.2.3    Taxation as a tool for Wealth Creation and Employment…………………..17

2.2.4    Economic Effect of Taxation……………………………………………….19

2.2.5    Government Revenue Generation…………………………………………..21

2.2.6    Problems of Tax Administration in Nigeria………………………………..22

2.2.7    Meaning of Economic Development and Growth………………………….24

2.3       Empirical Review…………………………………………………………..26

CHAPTER THREE: METHODOLOGY

3.0 Introduction…………………………………………………………………29

3.1       Research Design…………………………………………………………….29

3.2       Source of Data            ………………………………………………………………29

3.3       Re-statement of Hypotheses………………………………………………...30

3.4       Model Specification…………………………………………………………30

3.5       Technique of Data Analysis…………………………………………………32

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS

4.0 Introduction....................................................................................................34

4.1       Data Presentation...........................................................................................34

4.2       Results and Discussions……………………………………………………34

4.3       Testing of Hypotheses (With E-Views)…………………………………….38

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Summary…………………………………………………………………....39

5.2 Conclusion………………………………………………………………….40

5.3 Recommendations………………………………………………………….41

REFERENCES…………………………………………………………………….42

APPENDIX………………………………………………………………………...45

Taxation, besides its revenue generation capacity, can also be used as a fiscal policy tool to shape the economy. Considering that the Nigerian tax laws have witnessed significant changes over the period, it becomes imperative to assess the performance of such policies through its effect on the economy. The research therefore examines tax as a tool for economic growth in Nigeria. Using annual time series data sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin during the period 2005 through 2016, a econometric model of Labour Input (LAB), Domestic Investment (DINV), Foreign Direct Investment (FDI), Tax Revenue (TAXREV) and Gross Domestic Product in Nigeria was estimated using the Ordinary Least Square (OLS) technique. The empirical result suggests that tax revenue for the period 2005 to 2016 has no significant positive impact on economy growth in Nigeria. Meanwhile domestic investment for the period 2005 to 2016 has significant positive impact on economy growth in Nigeria. This results points to the need for additional measures by government in ensuring that taxpayers do not avoid and evade tax so that income can be properly redistributed in the economy. In addition, regulatory authorities charged with the sole responsibility of collecting tax should further be strengthened to enforce compliance by taxpayers. Above all, the tax collected should be properly distributed so that economic growth can be properly harnessed.