NIGERIA'S TAX STRUCTURE: AN ECONOMETRIC ASSESSMENT OF TAX PERFORMANCE AND ECONOMIC GROWTH DYNAMICS 2010-2023

Abstract

This study presents a comprehensive econometric analysis of Nigeria’s tax structure between 2010 and 2023, with particular focus on growth patterns, economic contributions, revenue relationships, and performance elasticities across six major tax categories. Drawing on secondary data obtained from the Central Bank of Nigeria, the research employs time series regression using the EViews statistical package to test the formulated hypotheses. The findings reveal that Company Income Tax (CIT) and Value Added Tax (VAT) exhibit strong and consistent associations with economic growth and revenue, supported by stable growth trajectories. In contrast, Petroleum Profit Tax (PPT) demonstrates volatility, weak links with growth, and low responsiveness, although it continues to contribute significantly to government revenue. Personal Income Tax is also shown to maintain a notable connection with real GDP in combined models. Overall, the results underscore the pivotal role of non-oil taxes, particularly CIT and VAT, in strengthening Nigeria’s economic resilience, while PPT’s instability highlights the vulnerabilities of oil dependence. The study recommends a strategic shift towards diversifying the tax base away from oil, enhancing the administration of CIT and VAT, addressing PPT volatility, and leveraging digital technologies to improve tax collection efficiency. Such measures will strengthen compliance, ensure fiscal stability, and support long-term sustainable growth.