Government Tax Policy and Private Sector Development in Nigeria: Evidence from Dynamic Panel Data Model

Sa？etak This study examined the in？uence of government corporate tax policy on the performance of 54 randomly selected listed companies that cut across 17 categories of non-？ nancial ？ rms in Nigeria over a period of 1990-2002. Using Generalised Method of Moment (GMM) and contrary to the expectation, the study found positive and signi？cant relationship between corporate tax policy and the output performance of quoted manufacturing ？ rms in Nigeria. This may be an indication that government revenue from corporate tax was judiciously expended on productive government expenditure such as road, security and power as nearly all ？ rms selected are located in Lagos State. The study therefore, suggested that corporate tax if judiciously used in the provision of physical infrastructures and other public goods would reduce the cost of production of the private sector in Nigeria