Publication Details
Abstract
This study investigates the impact of sin tax on economic development in Nigeria. This study adopted an ex-post facto research design using time series data from 1999 to 2023 to examine the impact of sin taxes on economic development in Nigeria, proxied by per capita income. The focus was on beer, tobacco, wine, spirit, and gaming and lottery taxes. Secondary data were sourced from the National Bureau of Statistics, Central Bank of Nigeria, and Federal Inland Revenue Service. Analytical techniques included descriptive statistics, unit root tests, ARDL bounds co-integration, and correlation analysis, with statistical significance determined at a 5% level using E-Views 10. The findings revealed that: beer tax with coefficient value of 4.820321, t-stat. of 3.798889 and p-value of 0.0000 had significant and positive impact on the economic development in Nigeria; tobacco tax had significant and positive impact on the economic development of Nigeria with [coefficient: 19.77436, t-stat: 3.133925, p-value: 0.0005]; wine tax had positive and significant impact on economic development with [coefficient: 0.256516, t-stat: 2.735617, p-value: 0.0020]; spirit tax indicated positive and significant impact on the economic development of Nigeria with [coefficient: 1.772186, t-stat: 2.583789, p-value: 0.0075]; gaming and lottery tax had significant and negative impact on economic development indicator in Nigeria. The study concluded that sin tax had positive significant influence and contribution to economic development in Nigeria. Based on the findings of the study, the study recommended that the government and her fiscal policy makers should sustain or review down the beer tax on such products, this will ensure that consumption is not constrained and flow of revenue for economic development financing is sustained.