Volume 13, Issue 1, 2024

Effect of Tax Reforms on Revenue Performance of Kwara State Internal Revenue Service

Tajudeen Idera Abdulmajeed, Gbenga Festus Babarinde, Sa’adatu Ibrahim Khaleel & Hamzat Kabir Mohammed

Abstract

This study examined the effect of tax reforms on revenue performance of Kwara State Internal Revenue Service, for the period, January 2018 to November 2022, using three cointegrating regression techniques: Fully Modified Least Squares (FMOLS), Dynamic Least Squares (DOLS), and Canonical Cointegrating Regression (CCR)). In line with ex-post facto research design, monthly time series data were obtained from secondary source, that is, the annual financial statements of the Kwara State Internal Revenue Service. The study focused on tax revenues from corporate entities, Ministries, Departments and Agencies (MDAs), and tertiary educational institutions in Kwara State, as explanatory variables while the total internally generated revenue of Kwara State Internal Revenue Service was the dependent variable. Empirically, the study indicates that tax revenues from corporate entities and tertiary educational institutions had positive and significant effects on revenue performance of Kwara State Internal Revenue Service. Also, tax revenue from MDAs had positive but nonsignificant effect on revenue performance of Kwara State Internal Revenue Service. It can be concluded that tax reforms, evidenced by tax revenues from corporate entities and tertiary educational institutions, significantly enhanced revenue performance of Kwara State Internal Revenue Service. The study recommends the diversification of revenue sources in Kwara State through various tax reforms geared towards expanding the State revenue generation in both short and long runs.

Keywords

Tax reforms, Internally Generated Revenue, Performance, Taxation, Kwara Sate Internal Revenue Service.

Full Text

Download

References

References
Adegbie, F. F., & Fakile, A. S. (2011). Company income tax (CIT) and Nigeria economic development. European Journal of Social Sciences, 22(2), 154 – 167

Animasaun R (2016). Tax administration and revenue generation: A perspective of Ogun State Internal Revenue Service. International Journal of Innovative Finance and Economics Research 5(1), 11-21.

Appah, E. (2014). Principles and practice of Nigerian taxation. Andy Best Publishers.

Aregbeyen, O., & Fasanya, I. O. (2013). Oil price volatility and fiscal behavior of government in Nigeria. Asian Journal of Economic Modelling, 5(2), 118-134.

Asaolu, T. O., Dopemu, S. O., & Unam, J. M. (2015). Impact of tax reforms on revenue generation Lagos state. Research Journal of Finance and Accounting, 6(8), 85–95.

Attali, J. G., Chambsa, G., & Combes, J. L. (2008). Corruption et mobilization desrecetes publiques: UneAnalyse Économétrique. Recherché Economique de Louvain.

Azubuike, J. U. B (2009). Challenges of tax authorities, tax payers in the management of tax consultants‟ option revisited. European Journal of Social Sciences, 8(4), 532-539.

Chijioke, N., Leonard, I., Bossco, E., & Henry, C. (2018). Impact of e–taxation on Nigeria’s revenue and economic growth: A pre – post analysis. International Journal of Finance and Accounting, 7(2), 19-26.

Chika, M., Nichita, R., Batranchea, L., & Moldovan, A. B. (2022). Tax compliance models: From economic to behavioural approaches. Transylvarian Review of Administrative Sciences, 3(6), 13–26.


Ebi, M. O., & Ayodele, O. (2017). Tax reform and tax yield in Nigeria. International Journal of Economic and Financial Issues, 7(3), 768-778.

Ebieri, J., & Ekwueme, D. C. (2016). Assessment of the impact of tax reforms on economic growth in Nigeria. Journal of Accounting and Financial Management, 2(2), 15-28.

Ebiringa, O. T., & Emeh, Y. (2012). Analysis of tax formation and impact on economic growth in Nigeria. International Journal of Accounting and Financial Reporting, 2(2), 367-385.

Emeneka, L. (2021). Tax morale and prosocial behaviour: Evidence from aPalestinian survey. Cambridge Journal of Economics, 40(3), 821-841.

Ezejiofor, D., Straub, D. W., & Boudreau, M. (2021). Structural equation modeling and regression: Guidelines for research practice. Communications of the Association for Information Systems, 4, 1–78.

Fossat, P., & Bua, M, (2013). Tax administration reform in the Francophone countries of SubSaharan Africa (IMF working paper 13/173).

FIRS (2012). Excerpts of the handbook: Federal Inland Revenue Service and taxation reforms in democratic Nigeria. Abuja: Federal Inland Revenue Service.

Gbeke, S., & Nkak, S. (2021). Factors that influence rental taxpayers’ compliancewith tax system: An empirical study of Mekelle city, Ethiopia. Researchers World, 3(4), 41-55.

Herbert, W. E., Nwarogu, I. A., & Nwabueze, C. C. (2018).Tax reforms and Nigeria’s economic stability. International Journal of Applied Economics, Finance and Accounting, 3(2), 74- 87. DOI: 10.33094/8.2017.2018.32.74.87

Ifurueze, M., & Ekezie, C. A. (2020). The Nigeria tax system and economic growth: A time series analysis. International Journal of Economics and Empirical Research, 2(4), 163-169.

IMF (2011). Revenue mobilisation in developing countries (IMF policy-paper/issue).

Jelilov, G., Abdulrahman, S., & Isik, A. (2016). The impact of tax reforms and economic growth of Nigeria. The Empirical Economics Letters, 15(5), 235-443.

Mirrlees, J. A. (1971). An exploration in the theory of optimum income taxation. The review of economic study, 38(2), 175-208.

Ndiaye, A. S. (2019). Effect of reforms on tax revenue performance in Senegal. African Economic Research Consortium, Nairobi, 1(2), 1-39.

Nwaorgu, I. A., Herbert, W. E., & Onyilo, F. (2016). A longitudinal assessment of tax reforms and national income in Nigeria: 1971-2014. International Journal of Economics and Finance, 8(8), 43-52.

Nzotta, S. M. (2007). Tax evasion problems in Nigeria: A critique. The Nigerian Accountant, 40(2), 40-43.

Ogbodo, Y., & Mehara, J. (2011). Does paying taxes improve the quality of
governance? CrossCountry evidence. Poverty and Public Policy. 3(3), 1-17.

Okeke, C. E., & Saluadeen, Y. M. (2021): Tax reform and tax compliance behaviour of companies in Nigeria. Forthcoming in: Bulletin of Applied Economics, Munich Personal RePEc Archive (MPRA,) 1-17.

Olajide & Associates. (2013). Nigeria tax reform.

Oriakhi, D. E., & Ahuru, R. R. (2014). The impact of tax reform on federal revenue generation in Nigeria. Journal of Policy and Development Studies, 9(1), 92-108.

Ramsey, F. P. (1927). A contribution to the theory of taxation. The economics journal, 37(145), 47-61.

Udezo, N. O., & Onuora, V. J. (2021). Effect of tax reforms on revenue performance in Nigeria. International Journal of Innovative Finance and Economics Research, 9(1), 118-130.

United Nations Economic Commission for Africa. (2010). African economic conference 2010 agenda for Africa’s economic recovery and long term growth.