DIRECT TAXES, INCOME REDISTRIBUTION GOVERNMENT EXPENDITURES AND POVERTY REDUCTION IN NIGERIA

Abstract

This study looked at the income redistribution spending, direct taxation, and poverty reduction
in Nigeria over a 29-year period, from 1995 to 2024. The objective was to assess how
government spending and direct taxation policies affected Nigeria's efforts to reduce poverty
and economic disparity. Descriptive statistics, the Autoregressive Distributed Lag (ARDL)
bounds test, the Augmented Dickey-Fuller (ADF) unit root test, and diagnostics tests were
used to improve the reliability of estimates and draw statistical conclusions at a 5% significant
level. According to the study, public spending on education and corporate income taxes have
a long-term favorable effect. Petroleum profit tax and public expenditure on education have
positive long-run relationship on the economy. Public expenditure on health has an inverse
long-run impact on poverty reduction in Nigeria. The study recommends that the government
should invest in critical infrastructure like roads, power and security through a fiscal blue print
that match revenue to a target capital infrastructure which ensures accountability and
industrialization that create jobs and yield economic prosperity thereby reducing or eradicating
poverty.