ABSTRACT
This study investigated the impact of direct taxes on human development in Nigeria. The longitudinal research design was adopted for this study. The data used in the study were obtained from secondary sources. Data were sourced from the United Nations Development Programme (UNDP, 2021) and the Nigerian National Bureau of Statistics. This study employed a quantitative method of data analysis. Augmented Dickey-Fuller Unit Root Test and Single Equation Co-integration tests were carried out as well as Descriptive analysis which was performed using mean, medium, maximum, minimum, skewness, kurtosis and the probability of jarque-berastatistics Diagnostic tests were also carried out to confirm stability and certify the integrity of data.
The findings of the regression analysis revealed that Company Income Tax (CIT) and Petroleum Profit Tax (PPT) have a positive relationship with a significant impact on Human Development Index (HDI) in Nigeria. However, Personal Income Tax(PIT) and Tertiary Education Tax (TET) were found to have a negative relationship with Human Development Index (HDI).
The study concludes that Company Income Tax and Petroleum Profit Tax are essential in the improvement of human development in Nigeria. Based on these findings, this study recommends that government should intensify efforts towards increased tax collection and better administration, especially regarding Company Income Tax and Petroleum Profit Tax. Government should also focus on increasing revenue from these sectors by creating a friendly environment for companies to thrive in and increasing the production and exportation of crude oil. In the case of Personal Income Tax, this study recommends that government should not waste too much resources in the collection and administration of this tax but instead work on reforms that could create a positive and significant relationship between this tax and Human Development in Nigeria.
