COMPANY INCOME TAX AND ECONOMIC PERFORMANCE OF NIGERIA: AN EMPIRICAL INVESTIGATION

Abstract

This study investigates the relationship between Company Income Tax (CIT) and Nigeria’s economic performance from 1990 to 2023, focusing on how tax revenue from the corporate sector contributes to Gross Domestic Product (GDP) expansion. This study employs an econometric regression analysis grounded in time-series data obtained from the Central Bank of Nigeria (CBN) and the Federal Inland Revenue Service (FIRS). The analysis evaluates both the short-run and long-run dynamics between CIT and GDP growth. The findings reveal a positive but statistically moderate impact of CIT on Nigeria’s economic growth, implying that while corporate taxation supports fiscal development; its effect is limited by inefficiencies in tax administration and high levels of evasion. The results underscore the need for fiscal authorities to pursue reforms aimed at expanding the tax base, enhancing compliance, and improving collection efficiency. For sustainable industrial growth and fiscal stability, this study recommends strengthening institutional capacity within the FIRS, promoting digital tax systems, and granting targeted incentives for productive corporate reinvestment. These findings have implications for fiscal policy management, industrial development strategies, and efforts to achieve Nigeria’s medium-term economic diversification agenda.