Effects of the Macroeconomic Environment, Policy and Administrative Measures on Revenue Performance: The Case of Nigeria (2010–2021)

ISSN: 2709-8575
Source: African Multidisciplinary Tax Journal, 2024 Issue 1

Abstract

This study examines the impact of specific macroeconomic variables on tax revenue performance in Nigeria. Utilising quarterly time series data from 2010 to 2021, sourced from various secondary references, the study employs a variance inflation factor (VIF) test to check for multicollinearity. The analysis is conducted using a multiple regression model. The findings indicate that the gross domestic product (GDP) has an insignificant positive effect on tax revenue in Nigeria. Conversely, the inflation rate and employment negatively affect tax revenue generation, although the influence of unemployment on tax revenue is statistically insignificant. The f-statistic value of the model confirms that the combination of the variables studied significantly impacts tax revenue. Therefore, the study concludes that macroeconomic variables are crucial determinants of tax revenue generation in Nigeria. It recommends that the Nigerian Revenue Authority should take measures to strengthen the relationship between GDP and tax revenue.