Rentierism and Taxation: Competing or Complementing Decimals in Nigeria’s Economic Growth?

Abstract

The economies and polities of countries dependent on oil are rapidly and relentlessly shaped by the influx of windfall revenue that sets them apart from other states. Rentier oil-states have a legacy of overly-centralized political power, strong networks of complicity between public and private sector actors, highly uneven mineral-based development subsidized by oil rents and the replacement of domestic tax revenues and other sources of earned income by oil rents. Nigeria is a classic example of a rentier oil-state with a disastrous development experience. The study aims to examine the rent-tax relationship and its impacts on Nigeria’s economic growth. It is anchored on the resource curse theory. A documentary research design was used for the study. Thus, data was obtained from reports and publications of relevant government and non governmental agencies. Data analysis was done using content analysis. The study revealed that the rent-tax relationship in Nigeria has been competitive rather than complementary. It also established that the competitive zero-sum nature of the rent-tax relationship has adversely affected economic growth in Nigeria. The study identified policy measures such as increased inter-sectoral co-operation, building public trust for tax compliance, tax reforms for purposive balancing, and review of tax expenditure as prerequisites for improving tax revenue and in effect, the rent-tax relationship in Nigeria’s economy.