Direct Tax And The Growth Of The Nigerian Economy: The Case Of Petroleum Profit Tax
George-Anokwuru Chidinma Chioma B
Department of Economics, Faculty of Social Sciences University of Port Harcourt, Nigeria
Obayori Joseph Bidemi
Department of Economics, Faculty of Social Sciences, Nnamdi Azikiwe University, Awka, Nigeria
Keywords: GDP, PPT, DOLS, Petroleum, Profit, Tax
Abstract
The paper examined direct tax and the growth of the Nigerian economy; the case of petroleum profit tax. The objectives of the study were to examine the impact of petroleum profit tax on economic growth and as well checked the impact of oil rent on economic growth in Nigeria. To achieve these objectives, secondary data was sourced from CBN statistic bulletin and World Bank data base. The technique of dynamic ordinary least square (DOLS) was used to analyze the link between the dependent and the independent variables. Meanwhile, both the Augmented Dickey Fuller unit root test and Johansen co-integration preceded the DOLS test in order to establish both the stationarity and long run equilibrium relationship of the variables. The empirical results showed that, the variable were stationary at I(1) and have long run equilibrium relationship. It was postulated from the DOLS result that the coefficient of determination is 97% and the f-statistics is significant at 5% level. Also, a direct and significant relationship exists between petroleum profit tax and economic growth. While, an indirect relationship exist between oil rent and economic growth. Based on these findings, the paper recommended amongst others that Nigeria government should coordinate the oil industry so that more revenue e generated should be well managed by channeling it to the critical sectors in the absence of systemic corruption in order to enhance economic growth