Evaluating the contribution of taxation on national revenue generation and economic growth

Taxation is a vital tool for funding public goods, services, and infrastructure, and it is essential for promoting stability and expansion in the economy. This research evaluates the role that taxes play in the national revenue pool and looks at how they affect economic growth. In addition to a poll of 439 randomly chosen people from different states, data were gathered from official tax records, scholarly publications, and government reports. To guarantee a thorough examination, the sample comprised economists, tax officials, and taxpayers. Regression analysis was carried out using the Ordinary Least Squares (OLS) model to assess the relationship among taxes and GDP growth while taking government spending, inflation rates, and tax compliance into consideration. The significance of these associations was evaluated using a variety of statistical tests, such as multiple regression analysis, descriptive statistics, t-tests, and F-tests. The findings demonstrate the significant contribution of taxes to revenue generation and economic development by showing a strong positive association among tax collection and GDP growth. In particular, the most significant predictors in the t-test research were tax revenue (t = 7.50, p = 0.000) and tax compliance (t = 7.22, p = 0.000). The results of multiple regression show that tax revenue (β = 0.150, p = 0.001) and investment levels (β = 0.120, p = 0.000) have the most effects on economic growth. These results highlight the necessity of improving tax collecting practices, raising compliance rates, and making the best use of tax income in order to promote economic improvement. To increase the tax base and guarantee sustainable development, tax administration must be strengthened through technology breakthroughs and better data management systems. In summary, this research emphasizes how crucial an effective tax structure is to long-term economic growth and stability.