Companies income, customs and excise duty tax gap and infrastructural development in Nigeria
International Journal of Development Research
Companies income, customs and excise duty tax gap and infrastructural development in Nigeria
Received 19th December, 2019; Received in revised form 06th January, 2020; Accepted 17th February, 2020; Published online 31st March, 2020
Copyright © 2020, EJEMAI, Mary Olayemi et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
The Every nation desire to have state of the art infrastructural amenities that will guarantee that its citizens are living a meaningful and comfortable life, such amenities include power supply, education, adequate security of lives and property, good transport system and access to good health care system. The level of infrastructural development present in a country will determine its categorization as a developed or developing country. Tax has been noted to be the most secure form of financing infrastructural development. Existence of tax gap has meant that government can not raise the desired amount to finance capital project. Insufficient information on the estimate of Companies Income Tax gap (CITG) and Customs and Excise Duty tax gap(CEDTG) has necessitated this study. The study adopted ex post facto research design. The population of the study was Companies Income Tax and Custom and Excise Duty in Nigeria for the period of 38 years (1981 – 2018). Data were sourced from the Central Bank of Nigeria (CBN) Statistical Bulletin and the Federal Inland Revenue Service Reports (FIRS). Data used were validated by the regulatory agencies and certified as reliable by the office of the Auditor -General of the Federation in line with government regulation. Data were analyzed using descriptive and inferential statistics employing the Auto Regressive Distributed Lag (ARDL) approach. The study found that there is significant positive impact of tax gap of CITG and CEDTG on infrastructural development. It was revealed that CITG and CEDTG have positive significant relation with capital expenditure on economic services, (Adj. R² = 0.69, F(2, 36) = 38.411, ρ<0.05). The study concluded that CITG and CEDTG can lead to a decrease in on capital expenditure over economic services and invariably infrastructural development. The study recommends that government should concentrate on tax revenue heads that significantly affect infrastructural development as this will lead to economic activities that can further grow the country.
