COMPARATIVE ANALYSIS ON IMPACT OF INCOME AND NON-INCOME TAX ON GROWTH PERFORMANCE IN NIGERIA.

ABSTRACT This study examined the comparative analysis on impact of income and non-income tax on growth performance in Nigeria from 1990-2024; using annual time-series data. The data for the study was sourced from the Central Bank of Nigeria Statistical Bulletin and the World Bank's Development Indicator. The specific objectives were to examine the impact of income and non-income tax on growth performance in Nigeria; and to examine the relationship between income tax, non-income tax, and growth performance in Nigeria. Descriptive and analytical techniques were carried out in testing the nexus between fiscal policy and income inequality in Nigeria. OLS analytical method was also used in the study also Post estimation test such as Ramsey RESET test, Heteroskedasticity: Breusch-Pagan Godfrey test, Breusch-Godfrey LM and Durbin Watson test statistics were employed. The study used real gross domestic product (RGDP) as the dependent variable while corporate income tax (CIT), personal income tax (PIT), petroleum profit tax (PPT), value added tax (VAT), and property tax (PT) were the independent variable. The study revealed that income and non-income tax had a positive impact on growth performance in Nigeria. Hence, increase in income and non-income tax will lead to increased growth performance in Nigeria. Also, the granger causality test shows no causality between income and non-income tax, and growth performance in any direction. The study however recommended that, government should prioritize broadening the tax base by formalizing the informal sector, enhancing tax registration systems, and improving tax identification frameworks. This will help increase revenue without necessarily raising tax rates, thereby sustaining the observed positive impact of tax on economic growth.