Effect Of Direct Taxes On Economic Growth Of Nigeria

ABSTRACT

This study investigated the effect of direct taxes on economic growth in Nigeria. To achieve this objective,  the study specifically investigated the effect of Company Income  Tax  (C11),  Petroleum  Profit  Tax  (PPT), Personal  Income  Tax(PJT)on economic growth in Nigeria.  The study restricted its scope to the period 1987-2016 and data used for  the study was sourced from  the Nigeria CBN, FIRS and World Bank  official  websites.  The multiple  regression  method  was  employed  as  the analytical tool. Findings  show  that at  the lag  length of  eight years  Company income tax  and petroleum  profit  tax  have positive  and  significant  effects  on economic growth  where as personal  income tax exerts the same direction and magnitude influence· at six years  lag length. The study therefore concludes that direct   taxes   are   strategic   to   economic   development   of   any   nation;   and consequently   recommend   that   Nigeria   should   improve   on   the   collection, accounting for  and investment of direct taxes in order to improve its economic growth and deal with the mono-economic trend.