This research examined the Impact of Tax Reforms on Economic Growth of Nigeria. Specifically, attempt was made to verify the relationship between federally collected revenue and specific tax revenue generation sources. The study employed annual time series data spanning the years (2005-2014). The various income taxes were used as a proxy for tax reforms and GDP as a proxy for economic growth.

The research adopted developmental research design. Data was basically collected by secondary means through Central Bank of Nigeria (CBN) statistical bulletin and the FIRS Guage.

Three hypotheses were formulated and tested with the used of regression analysis and T-test. Based on the result of the analysis, the three null hypotheses were rejected and the alternate hypotheses accepted. It was thereby concluded that; taxation reforms has significantly impact on revenue generation in Nigeria.; taxation reforms has significant effect on the Gross Domestic Product in Nigeria and that taxation reforms has significant impact on tax evasion.

The study proposed that VAT provides good tax handle for the government to maximize its revenue. However, to maximize revenue from these taxes, the administration should be improved upon with effort directed towards reducing tax avoidance and evasion.


Content                                            Page

Title page    -    -    -    -    -    -    -    -    -    -    i

Approval    -    -    -    -    -    -    -    -    -    -    ii

Dedication    -    -    -    -    -    -    -    -    -    -    iii

Acknowledgement    -    -    -    -    -    -    -    -    -    iv

Abstract    -    -    -    -    -    -    -    -    -    -    v


1.1       Background of the Stud

1.2       Statement of the Problem

1.3       Objectives of the Study                                 

1.4       Research Questions                           

1.5       Statement of Hypotheses       

1.6       Scope of the Study    

1.7       Justification of the Study

1.8       Definition of Terms                


2.1       Introduction               

2.2       Conceptual Framework          

2.3       Theoretical Framework                                              

2.4       Empirical Studies                                                                  

2.5       Review of the Existing Tax System  

2.6       Recent Tax Reforms

2.7       Gaps of the Literature


3.1       Introduction   

3.2       Research Design

3.3       Population of the Study

3.4       Sample Representation                      

3.5       Sample Technique                  

3.6       Method of Data Collection                                        

3.7       Statistical Analysis and Procedure                


4.1       Introduction   

4.2       Presentation of Data              

4.3       Test of Hypotheses                            

4.4       Regression Equation              

4.5       Discussion of Results            


5.1       Summary

5.2       Conclusion     

5.3       Recommendations     

5.4       Suggestions for Further Studies




1.1       Background to the Study:

The political, economic and social development of any country depends on the amount of revenue generated for the provision of infrastructure in that given country. However, one means of generating the amount of revenue for providing the needed infrastructure is through a well-structured tax system. According to Azubike (2009), tax is a major player in every society of the world. The tax system is an opportunity for government to collect additional revenue needed in discharging its pressing obligations. A tax system offers itself as one of the most effective means of mobilizing a nation’s internal resources and it lends itself to creating an environment conducive to the promotion of economic growth. Nzotta (2007) argues that taxes constitute key sources of revenue to the federation account shared by the federal, state and local governments. Odusola (2006) stated that in Nigeria, the government’s fiscal power is divided into three-tiered tax structure between the federal, state and local governments, each of which has different tax jurisdictions. The system is lopsided and dominated by oil revenue. He further argues that over the past two decades oil revenue has accounted for at least 70% of the revenue, thus indicating that traditional tax revenue has never assumed a strong role in the country’s management of fiscal policy. Instead of transforming the existing revenue base, fiscal management has merely transited from one primary product-based revenue to another, making the economy susceptible to fluctuations of the international market. It is on the account of this lopsided revenue structure that tax experts and scholars stated in clear terms that the Nigerian tax system need to be reformed to achieve long term economic growth and development.

Tax is a compulsory levy imposed on a subject or upon his property by the government to provide security, social amenities and create conditions for the economic well-being of the society (Appah, 2004; Appah and Oyandonghan, 2011). Anyanfo (1996) and Anyanwu (1997) stated that tax are imposed to regulate the production of certain goods and services, protection of infant industries, control business and curb inflation, reduce income inequalities etc. Tosun and Abizadeh (2005) say taxes are used as proxy for fiscal policy. They outlined five possible mechanisms by which taxes can affect economic growth. First, taxes can inhibit investment rate through such taxes as corporate and personal income, capital gain taxes. Second, taxes can slow down growth in labour supply by disposing labour leisure choice in favour of leisure. Third, tax policy can affect productivity growth through its discouraging effect on research and development expenditures. Fourth, taxes can lead to a flow of resources to other sectors that may have lower productivity. Finally, high taxes on labour supply can distort the efficient use of human capital high tax burdens even though they have high social productivity. Engen and Skinner (1996) suggest that a number of recent theoretical studies have used endogenous growth models to stimulate the effects of a fundamental tax reform on economic growth. All these studies conclude that reducing the distorting effects of the current tax structure would permanently increase growth.

Musgrave and Musgrave (2004) stated that the economic effects of tax include micro effects on the distribution of income and efficiency of resource use as well as macro effect on the level of capacity output, employment, prices, and growth.

However, the use of tax as an instrument of fiscal policy cannot be achieved because of dwindling level of revenue generated as a result of ineffectiveness of government officials. Kiabel and Nwokah (2009) argue that the increasing cost of running government coupled with the dwindling revenue has left all tiers of government in Nigeria with formulating strategies to improve the revenue base. Tax is dynamic, so reforms are necessary to effect the required changes in the national economy (Ola, 2001). Azubike (2009) noted that tax reform is an ongoing process with tax policy makers and tax administrators cont;inually adopting the tax systems to reflect changing economic, social and political circumstances in the economy.

Therefore, the objective of this study is to examine the impact of tax reforms on the economic growth of Nigeria (2005-2014).

1.2       Statement of the Problem

Taxation is a veritable source of government revenue. However, it is still debatable in the literature the optimal taxation to be imposed to enhance development without unjustly inflicting welfare cost.

Over 100 attempts at tax reforms in developing countries have been recorded since 1945. Tax reform has turned from a desired or preferred task to being a necessary one. One of the victims of numerous economic crises that have plagued developing countries since the first oil shock in 1973 has been the tax system. Consequently, tax collections have been hit hard resulting in large fiscal deficits.

Several studies on tax literature, both theoretical and empirical, have based their research works on tax revenue and economic growth (Avila and Strauch, 2008; Chin and Lai, 2009; Song, 2002; Chen, 2007; Folster and Henneksen, 2001; Weller, 2007 and Arnold, 2011). Nevertheless, only a limited number of studies explicitly recognize tax reforms or different changes in the nature and characteristics of tax systems of recipient countries and, hence, the ultimate effect of tax revenue on economic growth depends on how the public respond to changes in the tax systems.

Over the years, revenue derived from taxes has been very low and no physical development actually took place, hence the impact on the poor is not being felt. (Weller, 2007) Inadequate tax personnel, fraudulent activities of tax collectors and lack of understanding of the importance to pay tax by tax payers are some of the problems of this study. The issues mentioned above will therefore constitute the problem to be addressed by this research work.

1.3       Objectives of the Study:

The main objective of this research work is to examine the impact of tax reforms on economic growth. Specific objectives are as follows:

to identify main tax reforms in the country; to assess the impact of tax reforms on revenue generation in Nigeria to determine the extent to which tax reforms affect the Gross Domestic Product in Nigeria to assess the effect of tax reforms on tax evasion

1.4       Research Questions

Based on the above stated research objectives, the following three research questions are formulated to guide the study:

Based on the above stated research objectives, the following three research questions are formulated to guide the study:

How has tax reform impacted revenue generation in Nigeria? To what extent has tax reform affected Gross Domestic Product of Nigeria? To what extent has tax reform reduced tax evasion?

1.5       Statement of Hypotheses

The following hypotheses were formulated to be tested in the course of this study:

Hypothesis one      

H0:      Tax reforms have no significantly impact on revenue generation in Nigeria.

Hypothesis two       

H0:      Tax reforms have no significant effect on the Gross Domestic Product in Nigeria.

Hypothesis three

H0:      Tax reforms have no significant impact on tax evasion.

1.6       Scope of the Study:

Tax revenue generated by the Federal Government of Nigeria would be obtained in order to assess the impact of tax reforms on revenue generation and Gross Domestic Product of Nigeria. Time series variables obtained from published journals and the Central Bank statistical bulletin covering the period 2005-2014 would be obtained to evaluate the extent that tax reforms contributed to the steady growth in Gross Domestic Product in Nigeria. This period was chosen because tax reforms being enforced in the recent years.

The geographical area of this study covers Nigeria.

The research of study is Federal Inland Revenue Service (FIRS). Data will also be sourced from Central Bank of Nigeria (CBN) statistical bulletin and annual reports.

1.8       Justification of the Study:

The political, economic and social development of any country depends on the amount of revenue generated for the provision of infrastructure in that given country. However, one means of generating the amount of revenue for providing the needed infrastructure is through a well-structured tax system. The tax system is an opportunity for government to collect additional revenue needed in discharging its pressing obligations. Tax is dynamic, so reforms are necessary to effect the required changes in the national economy. Thus, this study provides information to government, tax administrators and tax policymakers on the different tax reforms and their effects on revenue generation. It also enhances knowledge on the processes of assessing the tax reforms for optimal generation of revenues by the Government of the Federation through Federal Inland Revenue Service (FIRS).

The research would also help the professional bodies like the chartered institute of taxation of Nigeria and the institute of chartered accountants of Nigeria as well as their members to see the areas of deficiency in the collections and call for improvement in tax revenue.

This research would also be relevant to the future researchers and the dents of accounting, economic, business administration and other social and management sciences as well as the legislations which will also benefit immensely from this research because it will form basis of tax policy formation, implementation and administration.

1.9       Definition of Terms

Tax:  Tax is a financial charge or other levy imposed upon a taxpayer (an individual or legal entity) by a state or the functional equivalent of a state such that failure to pay is punishable by law.(project topics   final year project topics )

Tax Reform: is the process of changing the way taxes are collected or managed by the government.

Tax Evasion: Here, the tax payer adopts illegal means so as to pay less than he should ordinarily pay.



RESEARCHWAP.COM is an online repository for free project topics and research materials, articles and custom writing of research works. We’re an online resource centre that provides a vast database for students to access numerous research project topics and materials. guides and assist Postgraduate, Undergraduate and Final Year Students with well researched and quality project topics, topic ideas, research guides and project materials. We’re reliable and trustworthy, and we really understand what is called “time factor”, that is why we’ve simplified the process so that students can get their research projects ready on time. Our platform provides more educational services, such as hiring a writer, research analysis, and software for computer science research and we also seriously adhere to a timely delivery.


Please feel free to carefully review some written and captured responses from our satisfied clients.

  • "Exceptionally outstanding. Highly recommend for all who wish to have effective and excellent project defence. Easily Accessable, Affordable, Effective and effective."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I saw this website on facebook page and I did not even bother since I was in a hurry to complete my project. But I am totally amazed that when I visited the website and saw the topic I was looking for and I decided to give a try and now I have received it within an hour after ordering the material. Am grateful guys!"

    Hilary Yusuf, United States International University Africa, Nairobi, Kenya.
  • " is a website I recommend to all student and researchers within and outside the country. The web owners are doing great job and I appreciate them for that. Once again, thank you very much "" and God bless you and your business! ."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I love what you guys are doing, your material guided me well through my research. Thank you for helping me achieve academic success."

    Sampson, University of Nigeria, Nsukka.
  • " is God-sent! I got good grades in my seminar and project with the help of your service, thank you soooooo much."

    Cynthia, Akwa Ibom State University .
  • "Great User Experience, Nice flows and Superb functionalities.The app is indeed a great tech innovation for greasing the wheels of final year, research and other pedagogical related project works. A trial would definitely convince you."

    Lamilare Valentine, Kwame Nkrumah University, Kumasi, Ghana.
  • "Sorry, it was in my spam folder all along, I should have looked it up properly first. Please keep up the good work, your team is quite commited. Am grateful...I will certainly refer my friends too."

    Elizabeth, Obafemi Awolowo University
  • "Am happy the defense went well, thanks to your articles. I may not be able to express how grateful I am for all your assistance, but on my honour, I owe you guys a good number of referrals. Thank you once again."

    Ali Olanrewaju, Lagos State University.
  • "My Dear Researchwap, initially I never believed one can actually do honest business transactions with Nigerians online until i stumbled into your website. You have broken a new legacy of record as far as am concerned. Keep up the good work!"

    Willie Ekereobong, University of Port Harcourt.
  • "WOW, SO IT'S TRUE??!! I can't believe I got this quality work for just 3k...I thought it was scam ooo. I wouldn't mind if it goes for over 5k, its worth it. Thank you!"

    Theressa, Igbinedion University.
  • "I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much, infact, I owe my graduating well today to you guys...."

    Joseph, Abia state Polytechnic.
  • "My friend told me about ResearchWap website, I doubted her until I saw her receive her full project in less than 15 miniutes, I tried mine too and got it same, right now, am telling everyone in my school about, no one has to suffer any more writing their project. Thank you for making life easy for me and my fellow students... Keep up the good work"

    Christiana, Landmark University .
  • "I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!."

    Musa, Federal University of Technology Minna
  • "I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!."

    Ali Obafemi, Ibrahim Badamasi Babangida University, Niger State.
  • To contribute to our success story, send us a feedback or please kindly call 2348037664978.
    Then your comment and contact will be published here also with your consent.

    Thank you for choosing