Tax Rates and Foreign Direct Investments in Sub-Sahara Africa, (Published)
The relevance of foreign direct investments (FDIs) in sub-Sahara Africa has been more overstated in recent years. The benefits it attracts cannot be quantified as it generally boosts a nation’s economy and standard of living. The volume of the influx of Foreign Direct Investments is, however, dependent on various factors. One of the numerous considerable factors includes Tax rates. Tax rates are the percentages at which an individual or corporation is taxed. The rates of tax can either positively or negatively affect the inflow of Foreign Direct Investments (FDIs) in a country. This study is carried out to examine the relationship and effect of tax rates with/on Foreign Direct Investments (FDIs), finding out if Value Added Tax is adversely related with FDI, if Personal Income Tax and Corporate Income Tax are significantly associated with FDI, and if Tax rates are major determinants of FDI in sub-Sahara Africa. Data was obtained from UNCTAD reports, World Bank reports, and Trading Economics reports. Multiple regression and correlation analysis were used to carry out analysis. From the analysis, it was discovered that Value Added Tax has an adverse and significant relationship with FDIs, Personal Income Tax rates has a negative and insignificant relationship with FDIs, and Corporate Income Tax rates has a positive but insignificant relationship with FDIs. It was also derived from the analysis that rates of tax do not majorly and significantly affect the inflows of Foreign Direct Investments (FDIs). It is recommended that the governments and tax regulatory bodies of every country should emphasize the importance of the tax rates in attracting foreign direct investments and foreign investors should also support tax rates by considering it more when investing in other countries.
Keywords: Africa, Foreign Direct Investment, Taxation
Impact of Taxation on the Growth and Development of the Nigerian Economy (Published)
The continuous collapse of Nigerian economy due to incessant lack of finance in government covers calls for urgent attention of researchers, this study hereby examines the impact of taxation on the growth and development of the Nigerian economy. The specific objectives of this paper are to examine the extent to which petroleum profit tax affects gross domestic product in the Nigerian economy; ascertain the effect of capital gain tax on the gross domestic product in the Nigerian economy; and to determine the effect of company income tax on the gross domestic product in the Nigerian economy. To achieve these objectives, ex-post facto design was adopted, Ordinary least square (OLS) regression method was used for the study as the statistical method for analysing the data gathered. Result from this study reveals that CGT and PPT are insignificant in revenue generation towards the economic growth of Nigeria. CIT on the other hand is significantly effective on the economic growth of Nigeria. Based on the findings of this study, the researcher recommended that to boost economic growth in Nigeria, government should ensure the tax revenue generated from PPT and CGT be improved upon so that the revenue can be used in providing infrastructure for the citizens; government should use tax policy more as a macroeconomic policy not just as a tool for revenue generation as this will result to long run sustain economic growth and tax revenue.
Keywords: CGT, CIT, Nigerian Economy, PPT, Taxation, growth and development
Impact of Tax Revenue on Economic Development in Nigeria (1997-2018) (Published)
The main objective of the study is to ascertain the influence of tax revenue on economic development of Nigeria. The specific objectives are; to determine the influence of petroleum profit tax, company income tax and value added tax on economic development proxy by human development index (HDI). Annual time series data, from CBN and FIRS from 1997 to 2018 was used. The study used regression analysis. The result showed that petroleum profit tax and company income tax have significant effect on economic development while value added tax does not significantly influence economic development. The implication of the finding is that the higher the amount of tax revenue generated, the higher the level of economic development experienced by the economy. This implies that taxes that have positive effect on economic development are direct taxes, thus direct taxes exert more significant influence on economic development of Nigeria than indirect taxes. This anomaly was attributed to dysfunctional ties in tax system, loopholes in tax law and inefficient tax administration. The lower the amount of revenue generated from tax the lower the quality of development to be witnessed. Government will generate higher revenue if they strengthen the legal and regulatory framework in order to control tax evasion and tax avoidance by taxpayers, improve on the system of tax administration, .The paper therefore recommended that tax policy makers such as federal inland revenue services and other tax regulatory bodies should strengthen their regulation on tax compliance mostly on tax that are direct based to curb tax evasion and tax avoidance by tax payers, adopt strategies to improve system of tax administration, by training and re- training of tax administrators through seminars and conferences to be abreast of modern trend in tax administration in order to generate more income for development.
Keywords: Gross Domestic Product, Tax Revenue, Taxation, direct and indirect tax, economic growth
The Relationship between Tax Burden and Foreign Direct Investment Inflows: A Review of Empirical Literature (Published)
This study reviews literature on the relationship between tax burden and foreign direct investments (FDI) inflows across the world. Various empirical research have found contradicting outcomes of the relationship between tax burden and FDI inflows. This study aims to establish the dominant relationship between tax burden and FDI inflows. Taxation components such as tax system, tax types, tax rates, tax base, tax structures affect the amount of tax revenues collected hence the tax burden. Therefore, in this study, tax burden was represented by itself and taxation components. The research found literature has two divergent relationships between tax burden and FDI inflows: negative and none. However, the relationships largely depended on the taxation components and country or economic region under study. The research findings demonstrate that world over there is no universal consensus on the relationship between tax burden and FDI inflows. Therefore, tax competition theory, which proposes that there is inverse relationship between tax burden and FDI inflows may not be applicable universally. The research implication is that the paper has demonstrated that inverse relationship between tax burden and FDI inflows is not universal. There is need to establish the relationship between tax burden and FDI inflows in any specific country or economic region. Countries that rely on the presumptive inverse relationship between tax burden and FDI inflows to shape their tax policy to attract FDI inflows should rely on empirical research findings undertaken in the country or economic region. The research recommends empirical studies on the relationships between tax burden and/or taxation components, and FDI inflows in specific countries and economic regions.
Keywords: FDI inflows, Tax Burden, Taxation
TAXATION AND AGRIBUSINESS TECHNOLOGY INTERFACE: STRATEGIC FINANCIAL MANAGEMENT IMPERATIVES IN NIGERIA (Published)
This study examined the moderating influence of technology in the relationship between taxation and return on investment in agribusinesses operating in Nigeria. Seven agribusinesses listed in the Nigerian Stock Exchange (NSE) Fact Book were involved in the study. Adopting the survey research design, questionnaire was administered on general managers, chief accountants, finance managers, and chief internal auditors of the selected firms as well as external auditors and tax administrators. Test re-test of the research instrument revealed very high reliability co-efficient. On account of this, the data generated were presented using tables, frequencies and percentages while the composite research hypothesis was tested regression and t-test analytical tools, aided by Software Package for Social Sciences (SPSS). The results was established a weak moderating influence while reaffirming the inverse relationship between taxation and return on investment. It is recommended that the efficiency-driven ideals of strategic financial management which imperatively underscore effective tax planning in order to justify all ensuing technology-related tax liabilities of agribusinesses for the ultimate sustainable diversification of the Nigerian economy.
Keywords: Strategic Financing, Taxation, Technology, agribusiness