Journal • CITN Journal

Editorial Board

Editor-in-Chief

Professor Rafiu Oyesola Salawu

Department of Management & Accounting, Faculty of Administration, Obafemi Awolowo University, Ile-Ife

Managing Editor

Professor Godwin Emmanuel Oyedokun

Department of Management & Accounting, Lead City University, Ibadan, Nigeria

Editorial Board Secretary

Mary-Fidelis Chidoziem Abiahu

Director, Research and Professional Standard, Chartered Institute of Taxation of Nigeria

Editorial Board Members

Professor Chinedum Nathaniel Nwezeaku

Federal University of Technology, Owerri

Professor John Adeoti

Nigeria Institute of Social and Economic Research (NISER), Ibadan

Professor Uche Jack-Osimiri

Faculty of Law, River State University, Port Harcourt

Professor Aruwa Suleiman Akwu-Odo Salihu

Nasarawa State University, Keffi Nasarawa State Nigeria

Dr. Eiya Ofiafoh Ofiafoh (Associate Professor)

Department of Accounting, University of Benin, Benin City, Nigeria

Dr. Stephen Chukwuemeka Mark Abani

MCSA Worldwide Projects Limited, Abuja, Nigeria

Dr. Kenny Adedapo Soyemi

Department of Accounting, Olabisi Onabanjo University, Ago Iwoye, Ogun State, Nigeria

Professor Joseph Uchenna Uwaleke

Department of Banking & Finance, Nasarawa State University, Keffi Nasarawa State, Nigeria

Barrister Chukwuemeka Eze

Faculty of Law, Nasarawa State University, Keffi Nasarawa State, Nigeria

Mr. Simon Nwanmaghyi Kato

Federal Inland Revenue Service, Chairman’s Office, Abuja, Nigeria

EFFECT OF TAX REVENUE ON PUBLIC DEBT AND CAPITAL EXPENDITURE IN NIGERIA

Description

EFFECT OF TAX REVENUE ON PUBLIC DEBT AND CAPITAL EXPENDITURE IN NIGERIA

Authors

Ntekpere Ukeme A. and Olayinka Ifayemi M.

Abstract

The citizens' need for accountability by the governments' continuous receipt of tax revenue without a corresponding reduction in public debt and increase in capital expenditure has raised questions on the effect of tax revenue on public debt and capital expenditure. It is against this background that the study examines the effect of tax revenue on public debt and capital expenditure in Nigeria during the period 1999 - 2018. Secondary data was sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin. It adopted the ordinary least square regression method by E-views program to study the effect of the independent variables (represented by value added tax, company income tax, petroleum profit tax and customs and excise duty) on the dependent variable (external debt, internal debt and capital expenditure). The data treatments used for the times series secondary data are Descriptive Statistics, Unit Root using Augmented Dickey–Fuller, Co- integration tests using Bounds Test and Vector Error Correction Model. The findings revealed that tax revenue had a statistically significant, positive and negative effect of on public debt and capital expenditure. Tax revenue had both 2 positive and negative effects on external debt in Nigeria (R = 0.789, f = 0.00010, p<0.05); Tax revenue had both positive and negative effects on internal debt in Nigeria 2 (R = 0.959, f = 0.00000, p<0.05) and Tax revenue had both positive and negative effects 2 on capital expenditure in Nigeria (R = 0.692, f = 0.00164, p<0.05).The study concluded that tax revenue has effect on public debt and capital expenditure in Nigeria. It was recommended that the government should ensure that revenue gotten from taxes are spent on profitable investments like capital expenditure. Also, to reduce public debt, fiscal authorities should enhance the effectiveness of the tax system by sealing loopholes and enforcing compliance. The government should also look to other sources of income in order to further reduce the burden of public debt.

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