FEDERALLY COLLECTED NON-OIL TAX REVENUE AND PUBLIC INFRASTRUCTURE DEVELOPMENT IN NIGERIA.

Abstract

This study focused on the impact of non-oil tax revenue collected by the federal government on public infrastructural development in Nigeria using road infrastructure and health infrastructure as proxies for public infrastructural development. It focused specifically on the effect of three main non-oil tax revenue components, namely, the Company Income Tax (CIT), Value Added Tax (VAT), and the Excise and Customs Duties (ECD). The study was ex-post facto and the population was national fiscal data from 1994 to 2025, while the tax categories that influence the development of infrastructure were selected using the purposive sampling technique. The secondary data used were of time series and obtained from Central Bank of Nigeria Statistical Bulletin, Federal Inland Revenue Service reports and National Bureau of Statistics spanning 36 years period (1994-2025). EViews software was used to analyze data by descriptive statistics and ordinary least squares regression. The road infrastructure model was found to have a good explanatory power of R-squared 0.8928 and adjusted R-squared 0.8813, while the health infrastructure model had an R-squared of 0.8621 and an adjusted R-squared of 0.8473. The results showed that CIT and VAT had a positive and significant impact on the road infrastructure, with ECD showing a statistically negative and significant impact on the road infrastructure. With regards to health infrastructure, the effect of CIT was negative but statistically not significant, VAT was positive and statistically significant and ECD was negative and statistically significant. The study has shown that non-oil tax revenue, especially the Value Added Tax (VAT) and Company Income Tax (CIT) has a significant role in the promotion of infrastructure development in Nigeria. From the results of the study, it is emphasised that the efficiency of non-oil tax mobilisation should be increased, fiscal transparency should be improved and tax revenues should be properly directed to productive infrastructure development. The study is in particular relevant for Sustainable Development Goals (SDGs) 3 (good health and well-being), 9 (industry, innovation and infrastructure), 11 (sustainable cities) and 17 (partnerships for the achievement of the SDGs), and contributes to the domestic resource mobilization for sustainable development.