Tax Revenue Generation and Economic Growth: A Pre and Post Treasury Single Account Implementation in Nigeria

This study examines the relationship between tax revenue generation and economic growth in Nigeria before and after the implementation of the Treasury Single Account (TSA). The TSA, introduced in 2012 and fully implemented in 2015, aimed to consolidate all government revenues into a single account at the Central Bank of Nigeria to enhance transparency, accountability, and financial management. The study focuses on key tax types—Value Added Tax (VAT) and Company Income Tax (CIT)—and their correlations with economic growth, measured by Gross Domestic Product (GDP) growth rates. Prior to the TSA implementation, weak correlations were observed between tax revenues and GDP growth. However, post-TSA, there emerged positive correlations, indicating improvements in tax collection and administration. VAT exhibited a weak positive relationship with GDP growth, while CIT showed a strong positive correlation, underscoring the impact of better tax practices on economic development. Additionally, custom and excise duties demonstrated a moderate positive correlation with GDP growth, suggesting enhanced revenue generation from trade-related taxes. The findings highlight the effectiveness of the TSA in improving tax revenue generation and its positive impact on Nigeria's economic growth. The study recommends that policymakers enhance VAT compliance, optimize CIT collection, and streamline customs procedures to further stimulate economic growth. These measures can ensure that the gains from TSA implementation are maximized, contributing to sustainable economic development in Nigeria.