Tax Base Broadening through Improved Business Environment in Nigeria

Abstract

This study assessed the response of expenditure on transport, health, education and access to electricity to shocks from external debt and reserves, and the impact of these infrastructures on tax bases like consumption, real GDP per capita, export, and import. Findings revealed that only access to electricity responds positively to shocks from external debt throughout the 10-year forecast period; transport responds positively from period 1 to 3 only; access to electricity, spending on transport and health significantly impacts import positively; spending on education and health alone positively impacts consumption significantly; spending on health alone positively impacts real GDP per capita. Amongst others, the study recommends long-term source of external finance (bonds, debentures or World Bank power project grants) for improving: access to electricity in Nigeria by generating more megawatts, installing more transformers, and supply more prepaid meters and health facilities in the country.