Lost Revenue Due to Trade Liberalization: Can Nigeria Recover Her Own?

European Journal of Business and Management, ISSN 2222-1905 (Paper), ISSN 2222-2839 (Online), Vol. 4, No.10, 2012

9 Pages Posted: 5 Nov 2012 Last revised: 12 Apr 2016

See all articles by Nathaniel Urama

Nathaniel Urama

University of Nigeria Nsukka - Department of Economics; University of Reading, United Kingdom; African Institute for Applied Economics (AIAE)

Emmanuel O. Nwosu

University of Nigeria - Department of Economics

Gladys Aneke

University of Nigeria Nsukka - Department of Economics

Date Written: August 7, 2012

Abstract

The aim of the study is to find out the possibility of recovering the tariff revenue that will be lost in the process of liberalization through restructuring of the domestic tax system in Nigeria by examining the buoyancy and elasticity of the tax system. Using the dummy method, commonly known as the Singer approach, the Nigerian tax system as a whole was found to be relatively buoyant but not elastic. The buoyancy however showed a decline close to 16% after the 1991 trade reform. Import duty despite the decline in its share in total tax from 47.3% before the reform to 28% over the reform period showed a positive increase in buoyancy. CIT collection measured by tax-to-base elasticity declined by 46% over the reform period, suggesting that there is an urgent need to improve on tax administration. Also, the result confirm the ineffectiveness of the various reforms and (DTMs) in enhancing the productivity of the tax system, showing that much need to be done in our domestic tax system, both in structure and administration before thinking of engaging in any bi- or multi-lateral trade agreement.

Suggested Citation

Urama, Nathaniel and Nwosu, Emmanuel O. and Aneke, Gladys, Lost Revenue Due to Trade Liberalization: Can Nigeria Recover Her Own? (August 7, 2012). European Journal of Business and Management, ISSN 2222-1905 (Paper), ISSN 2222-2839 (Online), Vol. 4, No.10, 2012, Available at SSRN: https://ssrn.com/abstract=2171075 or http://dx.doi.org/10.2139/ssrn.2171075

Nathaniel Urama (Contact Author)

University of Nigeria Nsukka - Department of Economics ( email )

Department of Economics,
University of Nigeria Nsukka
Nsukka
Nigeria

University of Reading, United Kingdom ( email )

School of Politics, Economics and Int. Relations
University of Reading
Reading, Berkshire RG1 5JG
United Kingdom
+447767906094 (Phone)

African Institute for Applied Economics (AIAE) ( email )

128 Park Avenue
GRA, Box 2147
Enugu, 004021
Nigeria

Emmanuel O. Nwosu

University of Nigeria - Department of Economics ( email )

Department of Economics,
University of Nigeria Nsukka
Enugu, 4100002
Nigeria

HOME PAGE: http://www.unn.edu.ng

Gladys Aneke

University of Nigeria Nsukka - Department of Economics ( email )

Department of Economics,
University of Nigeria Nsukka
Nssuka
Nigeria

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