TAX ADMINISTRATION AND ECONOMIC DEVELOPMENT

There has been disagreement on the extent to which tax revenue contribute to the development of the Nigerian economy. This study aims to assess the impact of tax administration on economic development in Nigeria. The study investigated the influence of four tax revenue streams ; Income tax from companies’ profits, income tax from personal Income, Petroleum Profits tax and Value Added Tax on economic development represented by Human Development Index (HDI). The research employs regression analysis to examine data on taxation and economic development across a 24-year period from 2000 to 2023. The data was acquired from the statistics Bulletin of the Central Bank of Nigeria (CBN), tax reports of the Federal Inland Revenue Service (FIRS), and the Human Development Report published by the United Nations Development Programme (UNDP).The study utilised the autoregressive distributed lag estimator (ADRL) to account for the varying levels of integration among the variables. The research findings indicate that there is no significant correlation between Companies Income Tax (CIT) and Economic Development (HDI) in Nigeria. There is no significant relationship between Personal Income Tax and Economic (HDI). Petroleum Profit Tax (PPT) and Value Added Tax (VAT), however, are significantly and positively related to economic development(HDI). The study therefore concludes that taxation can lead to positive economic development in Nigeria if policymakers examine the structure of Companies Income Tax and Personal Income Tax to address potential leakages or suboptimal utilisation. Their operations of the Value Added Tax and Petroleum Profit Tax should also be strengthened to ensure they contribute to economic development.