Open AccessTax revenue and private domestic investment: Evidence from Nigeria
Author(s) -
Richard Umeokwobi,
Emeka Nkoro
Publication year - 2019
Publication title -
international journal of business ecosystem and strategy
Language(s) - English
Resource type - Journals
ISSN - 2687-2293
DOI - 10.36096/ijbes.v1i4.286
Subject(s) - distributed lag , revenue , proxy (statistics) , tax revenue , investment (military) , ordinary least squares , business , order (exchange) , monetary economics , variables , economics , finance , public economics , econometrics , machine learning , politics , computer science , political science , law
This paper investigated the impact of tax revenue on private domestic investment in Nigeria from 1980 to 2018 using the modified ordinary least squares- Autoregressive distributed lag (ARDL). The paper used oil revenue, non-oil revenue, and Corporate Income Tax (CIT) as the independent variables while Private Domestic Investment (PDI) is the dependent variable. Oil revenue and non-oil revenue were used as a proxy for oil and non-oil tax. These data were obtained from secondary sources- central Bank of Nigeria, World Bank database and Federal Inland Revenue service statistical bulletin. The result showed that a long-run relationship exists between the aforementioned variables. Also, the paper revealed that oil and non-oil do not have a significant impact on PDI but CIT has a positive and significant impact on PDI. The paper recommends that proper measures/reforms should be put in place in order to reduce the impact of tax on private domestic investment in Nigeria.