Impact of Tax Laws and Reforms on Revenue Generation in Nigeria: 1994 to 2019

It is widely believed in many quarters that taxation remains the most veritable tool policy makers can used to generate more revenue to meet economic sustainable growth and development objectives. However, the issue of tax revenue leakages remains a major source of concern in developing economies like Nigeria. This has made many scholars to verge into the subject matter more holistically. Premised on this, the present study empirically investigated the extent to which tax policies and tax law has affected tax revenue generation in Nigeria from 1994 to 2019. Various tax policy/laws variables considered include petroleum profit tax, corporate income tax, value added tax and custom and exercise duties while revenue generation was measured by federally generated tax revenue. The study adopted the Autoregressive Distributed Lag Model. Judging by the F-statistics, all the tax policy variables were statistically significant and positively related to federally generated tax revenue. However, on individual basis, only custom and exercise duty affected revenue generation immensely both in the short and long run. Hence, we conclude that amidst high petroleum profit tax; Value Added Tax alongside the decreased corporate income tax, the Nigerian economy is yet to fully experience outstanding federally generated tax revenue, as reports from various authorities are showing that the tax to GDP ratios stands at 6%!. Again, we conclude that custom and exercise duty is the surest way to experience outstanding federally generated tax revenue. On this premise, we recommend, amongst others, that the federal government must ensure timely collection and remittance to the Federation Account of custom and excise duties as it contribute immensely to federally generated revenue.