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Authors
Dr Onomuhara Oke Godwin
Department of Accounting,
Faculty of Social and Management Sciences
Igbinedion University University
Okada
And
DR ISEREMEIYA COMFORT
Department of Accounting,
Faculty of Management Sciences
Ambrose Alli University
Edo state
Abstract
This study examines the effects of capital flight on Nigeria’s tax revenue.the specific objectives are to, determine the relationship between external debt and Nigeria’s tax revenue. determine the relationship between foreign direct investment and Nigeria’s tax revenue, determine the relationship between current account balance and Nigeria’s tax revenue, determine the relationship between foreign reserves and Nigeria’s tax revenue.
The summary statistics of all the variables under study were described in their raw form and transformed series, this was done in order to describe the data in naira and to determine the normality of the series. Specifically, the mean values of the External Debt (ED), In order to achieve the broad objective of this study, i.e. to determine the effect of capital flight on Nigeria’s tax revenue, the Augmented Dickey-Fuller and Phillip-Perron unit root tests were conducted. The result of these tests revealed that current account balance and foreign reserves measured by its natural logarithm are stationary at level, while tax revenue, external debt and foreign direct investment measured by its natural logarithm are stationary at first difference. As they are in different order of integration, Johansen co-integration test was performed to determine if they are cointegrated or not, and the outcome of the test showed that there is co-integration between them. The co-integration implies that capital flight and Nigeria’s tax revenue exhibit a long-run relationship. That is, they are related and can be combined in a linear fashion. Even if there are shocks in the short run, which may affect movement, they would converge in the long run.
Keywords- Capital flight, Tax , revenue, foreign direct investment,
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