Analysis of the Causal Relationship between Electronic Tax System, Tax Revenue and Economic Growth in Nigeria

Edirin JEROH^1*, M. N. OKOLO² and Michael T. SINEBE³

¹Assoc. Professor, Department of Accounting, Delta State University, Abraka, Nigeria

²Ph.D, Department of Accounting, Delta State University, Abraka, Nigeria

³M.Sc., Department of Accounting, Delta State University, Abraka, Nigeria

Article History

Received: 10.09.2022

Accepted: 30.09.2022

Published: 10.10.2022

Abstract: The current research documents the link between economic growth, electronic tax system and the trend of revenue components from education tax and value added tax. Based on the ex-post facto design, secondary data were therefore gathered and analysed given the study’s specified hypotheses and models. Statistical tools adopted include the descriptive statistics, co-integration test and the least square regression. Empirical evidence from our results indicates that the introduction and adoption of electronic system in the collection and payment of value added and tertiary education tax jointly impacts significantly on Nigeria’s GDP. Additionally, a long-run causal relationship was found to have existed between GDP, value added tax and tertiary education tax. With the result of the normalized co-integrating coefficient, our argument is that a 1% change in revenue generated from VAT will possibly trigger GDP upward by about 0.56%. Based on the above outcomes, we recommend amongst others that the decision of Nigeria’s regulatory agencies and relevant tax authorities on the deployment of the e-tax system should be sustained.

Keywords: Value Added Tax, Taxation, Nigeria, Finance Act 2019, Government Revenue, Gross Domestic Product