Tax Revenue, Social Welfare and Economic Growth: Empirical Evidence from Nigeria
Tax Revenue, Social Welfare and Economic Growth: Empirical Evidence from Nigeria

Summary/Abstract: The paper investigates the role of tax revenue in the effect of social welfare on economic growth in Nigeria, for the period 1970-2013, using Vector Error Correction Model (VECM). The VECM results show that social welfare has a negative and significant impact on economic growth, while petroleum profit tax and value added tax mitigate the negative relationship. Using another component of tax revenue, the results further show that social welfare has a positive and significant impact on economic growth, while corporate income tax and custom and excise duty unfavourably affect the positive relationship in the country. These findings suggest that the government should use tax revenue judiciously to improve infrastructure supporting facilities and thus engender economic growth in Nigeria.

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