Impact of Tax Revenue and Infrastructural Development on Economic Growth in Nigeria

Abstract

This study seeks to establish the impact of tax revenue and infrastructural development (through investment) on economic growth in Nigeria. It is expected that tax revenue should serve as an incentive for infrastructural development to strive and yield economic growth. The data used in the study was obtained majorly from World Development Indicator (WDI) Database 2022. Tax revenue was proxied as the actual total tax revenue collected from VAT, and CIT, and PPT. This formed the independent variables as well as Gross Capital formation (GCF) to represent infrastructural development. While the dependent variable is RGDP. The ARDL model was employed after variables were stationary at both levels and at first difference. The study found a significant long-run relationship among the variables. Specifically, PPT was found to be a strong contributor to economic growth in Nigeria. VAT was only positively significant at 15% accounting for economic growth. GCF and CIT were not significant in the study. The research employs a quantitative method of data analysis. These findings connote that GCF, VAT and CIT are yet to fully be additive components in the Nigerian economy. Government economic policy and financing henceforth should reflect good economic policy direction that will open up these components for economic growth in the country.