Oil Revenue a Hindrance to Tax Revenue Generation, Ghana and Nigeria.Tax and Oil Revenue Generation in Ghana and Nigeria

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Abstract

Abstract
The revenue generation through taxation of developing countries of Ghana and Nigeria was examined. The developing countries of Ghana and Nigeria were located in West Africa. It was found that collecting taxes in developing countries was an albatross. There was widespread challenges in tax administration and compliance in these countries. Furthermore there was non-effective record-keeping coupled with the existence of a large informal sector which made revenue difficult to verify. Challenges faced by the revenue collecting authorities also compounded the problem. A comparison of taxes collected from the two countries revealed that even though Nigeria was much bigger and considered a “heavyweights” of Africa, Ghana, Africa’s promising emerging economy, generated more tax revenues as a percentage of gross domestic product (GDP) than that of Nigeria. Further analysis revealed that Nigeria’s oil revenue as a percentage of GDP was higher than Ghana in all years under analysis but the gap narrowed as the years went by.

Authors

• Loretta Baryeh, Coppin State University

• Hyacinth ezeka, Coppin State University