Effect of Company Income Tax Productivity on Economic Development in SubSaharan Africa

Abstract

The study examined the effect of company income tax (CIT) productivity on the economic development of three Sub-Sahara African Countries (SSA) of Nigeria, South Africa, and Kenya. In line with the objective of the study, relevant data were collected from the World Bank and Organization for Economic Co-operation and Development (OECD) database from 1995 to 2018. The study adopted an ex post facto research design. Augmented Dickey-Fuller unit root test was used for the stationarity test of the data. Johansen Cointegration test was used to test the long-run relationship of the variables. Ordinary Least Square (OLS) was used to test the hypothesis at 5% level of significance. The findings revealed that CIT was found to have a positively significant influence on Human Development Index (HDI) in Nigeria, negatively significant effect in South Africa and negatively insignificant effect in Kenya. Based on the findings, the study, therefore, recommended that Nigeria should strategize to achieve economic development through increase in CIT but South Africa and Kenya should ignore the use of CIT strategy as the two countries have a negative significant and insignificant influence on HDI respectively.