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Issues in Business Management and Economics
Vol.3 (5), pp. 74-80, May 2015
ISSN 2350-157X
Available online at
Article ID /BM/14/029/07 pages
Author(s) retain the copyright of this article. Author(s) agree that this article remain permanently open access under the terms of the Creative Commons Attribution License 4.0 International License.

Original Research Article

The implications of tax revenue on the economic development of Nigeria

Sunday C. Nwite

Department of Banking and Finance Ebonyi State University, Abakaliki, Nigeria.

Author’s Email: nwitewhite2006(at)

date Received:     date Accepted: May 24, 2015     date Published:


Taxation is not a new phenomenon as the major sources of revenue to Nigerian government prior to the coming of the British colonial masters. However over the years concerned citizens have argued whether tax revenue has been effectively utilized for the economic development of Nigeria. This study therefore, examined the implication of tax revenue on the economic development of Nigeria from the 2000 to 2010.The study first traced the historical background of taxation in Nigeria, the meaning of taxation and the concept of economic development. Pearson product moment correlation formula was used to test the hypothesis of this study. It was discovered that there is no significant relationship between tax revenue and economic development in Nigeria. The study also shows that taxation apart from being a source of revenue to government is also used to achieve economic goals such as, correlation of adverse balance of payment, and also a means of tackling inflation and deflection. However, there are some problems and challenges facing tax collection in Nigeria as shown in this study. At the end, the following recommendations were made that taxation should be used effectively to pursue economic development. That Nigerian government should review her tax policies, sensitize the public on the need to pay taxes and set adequate regulatory and supervisory framework to ensure compliance and effective utilization of tax fund. Etc.

Key words: Taxation, economic development, direct tax, indirect tax, revenue, cannon of taxation.