Impact of Tax revenues on Manufacturing Sector Output in Nigeria

Authors

• Oladayo Timothy Popoola (PhD), Department of Economics, Ahmadu Bello University ZariaFollow
• Maria Funmilayo Ogunlade, Department of Economics, Ahmadu Bello University Zaria

Keywords

Corporate income tax, Capital-gain tax, VAT, Petroleum-profit tax, Dynamic Ordinary Least Square, Nigeria

Abstract

This study estimated the impact of Tax revenues (such as, corporate income tax, capital-income tax, VAT, and petroleum-income tax) on manufacturing sector output in Nigeria. It utilized Dynamic Ordinary Least Square (DOLS) that allows individual linear combination of variables, correct endogeneity and serial correlation issues. The study covered the period of 2011 and 2023 using quarterly dataset. Findings reveal that a 10 percent reduction in VAT and petroleum-profit tax revenues improves manufacturing sector output by about 6.58 and 0.78 percent in the short-run and, 2.08 and 5.12 percent in the long-run, respectively. And a 10 percent decrease in corporate income tax and Capital-gain tax revenues increases manufacturing sector output by 3.15 and 0.85 percent in short-run, and 5.57 and 2.4 percent in the longer periods. Based on these findings, the study recommends that Nigeria's policy makers should reduceccorporate income tax and Capital-gain as they exert very significant negative impact on manufacturing sector output. However, government could moderate VAT and petroleum-profit tax to encourage both demand- and supply-sides of the Nigerian economy.

Author Bio

Senior Lecturer, Department of Economics, Ahmadu Bello University Zaria

Publication Title

nil

Issue

1

Volume

50

First Page

6

Last Page

19

Recommended Citation

Popoola, Oladayo Timothy (PhD) and Ogunlade, Maria Funmilayo (2026) "Impact of Tax revenues on Manufacturing Sector Output in Nigeria," Bullion: Vol. 50: No. 1, Article 4.
DOI: https://doi.org/10.33429/0331-7919.1579
Available at: https://dc.cbn.gov.ng/bullion/vol50/iss1/4