Universal Journal of Accounting and Finance Vol. 9(4), pp. 783 - 789
DOI: 10.13189/ujaf.2021.090424
Reprint (PDF) (356Kb)


Personal Income Tax Revenue and Nigeria's Aggregate Earnings


Cordelia Onyinyechi Omodero 1,*, Michah Chukwuemeka Okafor 2, Josephine Adanma Nmesirionye 2
1 Department of Accounting, College of Management and Social Sciences, Covenant University Ota, Ogun State, Nigeria
2 Department of Accounting, College of Management Sciences, Michael Okpara University of Agriculture Umudike Umuahia Abia State, Nigeria

ABSTRACT

The contribution of personal income tax to gross national income is assessed in this study. Over the years, tax revenue has been an important government source of income to finance public goods and services. In Nigeria, the tax structure includes personal income tax (PIT) as well as other direct and indirect taxes. There is PIT collection by both the state and federal governments. This study examines the influence of PIT on aggregate income of the country from 2011 to 2020 using ordinary least squares method. The dependent variable is the gross national earnings while the independent variable is the personal income tax collected at the federal government level in Nigeria. The study finds corruption and inflation as two useful control variables that have direct influence and link with individuals' tax compliance in Nigeria. The data sources include the Organization for Economic Co-operation and Development (OECD) for PIT figures, Transparency International (TI) for Corruption Perceptions Index (CPI) data and World Bank Economic Indicators for Gross National Income (GNI) and inflation statistics. The empirical findings reveal that PIT has a significant positive influence on the gross national income. The moderating variables applied are not significant and could not explain the vicissitudes in the gross national earnings. The study recommends improvement in the PIT administration to boost tax revenue collections and remittances to the government treasury. Further suggestion by this study is that corruption and inflation should be minimized to enhance PIT collection at both federal and state government levels.

KEYWORDS
Gross National Revenue, Personal Income Tax, Corruption, Inflation, Remittances

Cite This Paper in IEEE or APA Citation Styles
(a). IEEE Format:
[1] Cordelia Onyinyechi Omodero , Michah Chukwuemeka Okafor , Josephine Adanma Nmesirionye , "Personal Income Tax Revenue and Nigeria's Aggregate Earnings," Universal Journal of Accounting and Finance, Vol. 9, No. 4, pp. 783 - 789, 2021. DOI: 10.13189/ujaf.2021.090424.

(b). APA Format:
Cordelia Onyinyechi Omodero , Michah Chukwuemeka Okafor , Josephine Adanma Nmesirionye (2021). Personal Income Tax Revenue and Nigeria's Aggregate Earnings. Universal Journal of Accounting and Finance, 9(4), 783 - 789. DOI: 10.13189/ujaf.2021.090424.