International Journal of Multidisciplinary Research and Development

International Journal of Multidisciplinary Research and Development


International Journal of Multidisciplinary Research and Development
International Journal of Multidisciplinary Research and Development
Vol. 8, Issue 6 (2021)

Fiscal policy and economic behaviour in Nigeria


Nye Oruwari

Fiscal policy and economic behaviours in Nigeria, is a study carried out to determine the ways by which the economy can be made effective through the use of some policy instruments of the rate of real gross domestic product, government expenditure on health and education, personal income rate, company income rate and value income tax rate. It is based on these variables, this study investigate the fiscal policy behaviour in the economy in other to stimulate performance for the satisfactory socio-economic life of the population of the people in the country. Using the technique of autoregressive distributive lag model (ARDL) and error correction model (ECM) the investigation indicates that personal income tax rate has a negative significant effect on the rate of real gross domestic product at a five percent significant level. This implies that a one percent increase in personal income, tax rate leads to a zero point three percent fall in the rate of gross domestic product. That company income tax rate and government expenditure on health are both significant on real gross domestic product. And that company income tax rate negatively influence inflation at five percent level of significance. In addition is that a one percent rise in company income tax rate results to two point-two drops in inflation. Both value added tax and personal income tax have positive and significant effects on unemployment. However, government expenditure on education shows no significance. This study therefore recommend that government widens her tax base for more tax payers and corporate organizations to be imputed into the tax regimes. This should be done to ensure that more individuals and corporate bodies are enlivened with tax compliance while lower tax rates need to be put in place.
Pages : 01-09