ABSTRACT
This study examines the impact of tax on manufacturing sector performance in Nigeria. For this study, ex post facto research design is adopted. The time series properties of data series employed in the estimation equation is tested for stationarity using Augmented-Dick-Fuller (ADF) unit root test. The study covers the impact of taxation as it relates to manufacturing sector in Nigeria for a period of 35 years (1981 to 2015). The findings of the study therefore revealed that tax rate has significant impact on manufacturing sector performance in Nigeria during the chosen period of observation and company income tax has significant impact on manufacturing sector performance in Nigeria. In addition, the R2 stood at 96 percent total variation on manufacturing sector performance in Nigeria affected by the influence of the increase in Capital Customs and Excise Duties charged, Company Income Tax and Petroleum Profit Tax. The study therefore recommends that the federal board of Inland Revenue should try to device a formula to ensure smooth payment of these taxes, they should make payment as cheap as possible so that tax payers will not see payment as a burden and therefore should pay tax voluntarily without any grant of dissatisfaction. In addition, for the PPT policy to have a more significant impact on the revenue and economic development of Nigeria, Government should minimize or find ways of eliminating totally the widespread corruption and leakages in the petroleum profit tax administration. Conclusively, it is suggested that government should pay attention to the factors that influence the willingness of citizens to pay tax and improve on them, thereby improving peoples‟ willingness to pay tax, government revenue and economic growth and development of the nation generally, lending credence to the Lindahl and Bowen models showing relationship between tax revenue and economic growth and development.