FISCAL POLICY AND INCOME INEQUALITY IN NIGERIA
Abstract
This study analyzed the influence of fiscal policy on income inequality in Nigeria from 1994 to 2023. Specifically, we examined how petroleum profit tax (PPT), company income tax (CIT), custom and excise duty (CED), value-added tax (VAT), government recurrent expenditure (GRE), and government capital expenditure (GCE) affect income inequality. Data utilized in the study were sourced from the Central Bank of Nigeria and World Bank Development Indicators of various issues. The study applied the unit root, Johansen co-integration, and Parsimonious ECM model at the 5% significance level. The study discovered that all the various were stationary at their first difference; thus, requiring the Johansen co-integrating equation that validates the presence of long-run form. The result showed that CIT was positive but insignificant to income equality, PPT and GRE were positive and significant to income inequality, CED was negative and significant to income inequality, VAT and GCE were negative but insignificant to income inequality. The study concluded that the three dimensions of fiscal policy in Nigeria that substantial influence her income inequality are petroleum profit tax, custom and excise duty, and government recurrent expenditure. Amongst others, the study recommended that the Federal Government of Nigeria should to allocate CIT funds towards specific social and economic initiatives that advantage low- and middle-income demographics. The government ought to augment spending in education, healthcare, and skill development initiatives utilising CIT funds, hence broadening economic chances for the underprivileged.
This article is available as a PDF download
Published in BUSINESS AND FINANCE JOURNAL
ISSN: 988-47876
This article appears in our peer-reviewed academic journal
View JournalRelated Articles
Explore similar research in our collection
CASH MANAGEMENT STRATEGIES AND THE FINANCIAL PERFORMANCE OF COMMERCIAL BANKS LISTED IN NIGERIA
EBE, EMMANUEL CHUKWUMA, Ph.D, IROABUEKE, NKWACHUKWU PROMISE, UGO, CELINA AMAUCHECHUKWU, Ph.D
May 27, 2026
This study investigates how cash management strategies influence the financial performance of listed...
View ArticleENVIRONMENTAL MANAGEMENT ACCOUNTING AND PERFORMANCE OF LISTED CONSUMER GOODS MANUFACTURING COMPANIES IN NIGERIA
FAGBEMI, OLUWAREMILEKUN DEBORAH-ALABI, SILVIA NWAKAEGO ONYEKACHI
May 11, 2026
This study explores the effect of environmental management accounting (EMA) on the financial perfo...
View ArticleEFFECT OF PUBLIC ACCOUNT COMMITTEES (PACs) ON ACCOUNTABILITY AND TRANSPARENCY IN PUBLIC EXPENDITURE OF OSUN STATE
Olagunju Adebayo,,, Bamigboye O. Adex, Adegbola M. Makinde, Adekunle A. Tirimisiyu
May 6, 2026
This study explores the connection between PACs effectiveness of accountability an...
View Article