Tax reforms and investment in Nigeria: an empirical examination

This study is informed by the quest to examine the investment implication of the series of tax reforms in Nigeria, particularly the tax reforms of 2003 and National tax policy of 2012. Annual time series data spanning the years (1981-2012) were utilized. Preliminary diagnostic test was conducted to examine whether the estimated model satisfies the OLS assumptions. The basic assumptions of the OLS were satisfied. The result of the estimated OLS model shows that tax reform as proxied by VAT and CIT, both positively and significantly stimulate investment in Nigeria. The study recommends that efforts should be made towards intensifying the tax reforms. Further, policies should be directed towards redressing multiple taxation and high company income tax as both have the tendency to adversely affect investment.Key words: Tax reform, Investment, Preliminary diagnostic test, National tax polic