TAX REVENUE VOLATILITY AND ECONOMIC GROWTH OF NIGERIA

ABSTRACT

This abstract explores the dynamic relationship between tax revenue volatility and economic growth in Nigeria. Due to its significant reliance on income from oil sales, investments and household consumption, Nigeria's economy is marked by a high degree of volatility in its tax receipts (PPT, CIT and VAT). The effect that this revenue volatility has had over the last several decades on the nation's overall economic growth is examined in this study. Using both quantitative data analysis and critical research of fiscal policies and economic performance to evaluate the Nigerian economy, this study attempts to explain the effect of taxation and economic growth synergy. Empirical research indicates that volatility in tax revenue has a major impact on Nigeria's economic growth, particularly when there are shocks in the economy. According to the study, consumption tax has proven to have a significant relationship with economic growth, where an increase negatively impacts economic growth and vice versa. In order to stabilize government finances during times of revenue shocks, it also highlights the necessity of a strong framework for fiscal policy. The abstract also highlights how important it is to maintain responsible fiscal policy, rely less on oil revenue, and put changes in place that will improve tax administration and compliance.