REGIONAL ECONOMIC DEVELOPMENT: HOW RELEVANT IS TAX REVENUE? THE CASE OF SOUTH-SOUTH REGION OF NIGERIA

Abstract

Economic development of regions in developing countries especially Nigeria, ishinged on lasting infrastructural development. The growing need for infrastructure and the clamour for economic development had made tax revenue as a means of financing the infrastructure to be in the lime light. Tax is seen as a fiscal policy tool, and government uses it in redistributing its resources, financing its infrastructural projects for economic development, andensuring equity. For the South-south region, shortage of physical  infrastructure had been identified as a major challenge hindering the development of the region. Key infrastructures like power, roads, railways, airways, portable water, health facilities, are deficient in the region andthis had hindered the economic development of the region. Since tax is seen as a means of financing infrastructure for development, this study aimed at determining how relevant tax revenue is in the economic development of the region. Using a panel model in analysing the cross-sectional time series data, sourced from the various states budget, the result from the analysis affirmed that states internally generated tax revenue is relevant in enhancing regionaleconomic development, specifically, the South-south region of Nigeria. It was recommended that regional governments expand their tax base, reduce tax revenue linkages caused mostly by corrupt and sharp practices, and reduce tax evasion, in order to generate more revenue for financing their fiscal responsibilities for economic development of the regions