This study investigated the impact of company income tax revenue on economic growth in Nigeria. This study used secondary data which was subjected to econometric analysis. The study made use of the judgmental sampling technique. The Central Bank of Nigeria (CBN) and Federal Inland Revenue Service (FIRS) have been chosen for the purpose of this study. The study employs the Ordinary Least Square Regression Technique in the analysis of the secondary data obtained from the Central Bank of Nigeria statistical Bulletin Using Eviews. The result of the regression analysis reveals company income tax was statistically significant at 5% level of significance using F-statistics and other statistical parameter. The study concludes that company income tax has significant impact on economic growth and living standard in Nigeria. The study hereby recommended tat; There should be stringent penalty imposed on any corporate body who indulge in any form of tax malpractices irrespective of states; Efforts should be intensified by the government towards increased collection of tax revenue; This can be done through blocking all loopholes in our tax laws as well as bringing more prospective tax payers into the tax net (especially the informal sector); Government through Federal Inland Revenue Service should create an effective and reliable data base for every corporate entity to minimize (if not eliminate) the incidence of tax evasion and there should be constant training and re-training of CIT administrators through seminars, conference to keep them abreast with the modern trend in tax administration.




1.1    Background of the Study

One of the major functions of any government especially developing countries such as Nigeria is the provision of infrastructural services such as electricity, pipe-borne water, hospitals, schools, good roads and as well as ensure a rise in per capita income, poverty alleviation to mention a few. For these services to be adequately provided, the government should have enough revenue to finance them. The task of financing these enormous responsibilities is one of the major problems facing the government. Based on the limited resources of government, there is a need to carry the citizens (governed) along hence the imposition of tax on all taxable individuals and companies to augment government financial position. To this end, the government have always enacted various tax laws and reformed existing ones to stand the taste of time. They include Income Tax Management Act (ITMA), Companies Income Tax Decree (CIID), Joint Tax Board (JIB) etc.

The contribution of company income tax to the growth and development of any economy cannot be overemphasized. Apart from being a major source of revenue to the government, it also serves a means by which governments actualize certain macroeconomic goals. It is therefore of no doubt that tax is a major tool used by the most government to promote growth and development (Ahunwan, 2009). Furthermore, the first need of any modern government is to generate enough revenue which is indeed “the breath of its nostril”. Thus taxation is by far the most significant source of revenue for the government. Nigerians regard payment of tax as a means whereby the government raises revenue on herself at the expense of their sweat. It is good to note that no tax succeeds without the taxpayer’s cooperation. Here, we can ask some thought-provoking questions such as: what makes taxation such a difficult issue? Why do people feel cheated when it comes to tax? Is the government making judicious use of taxpayer’s money? What are the problems affecting the successful operation of tax systems in Nigeria? How does the government determine the Assessable income of companies?