CUSTOM AND EXCISE DUTIES AND ECONOMIC DEVELOPMENT IN NIGERIA

Abstract

This paper examined the influence of custom and excise duty taxes on economic development in Nigeria. An ex-post facto research design was used, and secondary data were collected from the Central Bank of Nigeria statistical bulletin and the Federal Inland Revenue Service website. Custom and excise duty is the independent variable, while economic development is the dependent variable, which was measured by means of human capital development and gross domestic product. Data obtained for the investigation was evaluated via time-series properties and findings revealed that custom and excise duty tax has an insignificant influence on gross domestic product and human development index in Nigeria. Based on this finding, the study suggests that a major issue that should be addressed is the leakages and loopholes in the system that create room for importers to pay less or even more than the required customs and excise duty and thus there is a need for more transparency in the activities of the customs service. Another consideration is that the custom and excise duty must not be such that it serves as a disincentive for export and import trade and this is even more critical because the mark-up on prices of tradables is passed on to the final consumer and this thus increases the tax burden for Nigerians.