TITLE:               

Tax Revenue Optimization from Transfer Pricing, Corruption Control and Economic Growth in Nigeria

AUTHORS:     

Ogbebor, Peter I, Lawal, Esther, Adegboyega, Adewale Nurudeen

DOI:  10.5110/77. 1402              Page:   05-20          Vol: 19    Issue: 04   Year: 2024

creative commons, cc, character-785334.jpg   

ABSTRACT

This study examined the effect of Tax Revenue Optimization from Transfer Pricing, Corruption control and Economic Growth in Nigeria from 1986 to 2022. The harmful impacts of multinational corporations’ transfer pricing policies which are detrimental to income tax revenues of developing nations especially countries identified as epic centers of corruption presents a special case; hence, this scenario was examined in the case of Nigeria. The study adopts an ex-post factor research design, utilizing an autoregressive distributed lag modelling and bound testing cointegration as the estimation techniques. The results revealed that transfer pricing (β= 0.384, p-value = 0.629) showed a non-significant positive effect on GDP. However, the effect of domestic non-oil revenue (β= 1.356, p-value = 0.029) on GDP was significant, indicating that a 1% increase in domestic non-oil revenue is associated with a substantial increase in GDP. The findings further showed that the interactive effect of transfer pricing and corruption control (β= 0.524, p-value = 0.474) is not significant on economic growth in Nigeria. Therefore, the study concluded that the interactive effect of transfer pricing and corruption control is not statistically significant to influence economic growth in Nigeria. The study recommended that the policymakers should intensify efforts to combat corruption which will lead to increase in tax revenue from MNCs activities in Nigeria. Strengthening anti-corruption agencies such Economic and Financial Crimes Commission (EFCC), Independent Corrupt Practices Commission, among others can contribute to a healthier economic

 Keywords:

Transfer Pricing, Economic growth, Tax Liability, Trade Openness, Domestic Non-Oil Revenue

Received: 11 March 2024

Accepted: 26 March 2024

Published: 05 April 2024

PDF