Title: Taxation and human development index: comparative analysis of the United States of America and Nigeria
Authors: Dr. Gilbert O. Nworie , Chukwuchebem Christian Umahi
Volume: 10
Issue: 7
Pages: 224-233
Publication Date: 2026/07/28
Abstract:
This study compared the influence of taxation on human development outcomes in the United States of America and Nigeria. The specific objective was to investigate the differences in how tax revenue contributed to improvements in human development index over the period 2004 to 2024. The study adopted an ex-post facto research design and relied on secondary data collected from the Federal Inland Revenue Service reports and the World Bank Development Indicators. The population covered all available annual tax and human development data for the two countries, and the entire dataset spanning twenty-one years was used as the sample. The hypothesis was tested using the fully modified least square (FMOLS) regression technique at a 5% level of significance. The finding revealed that taxation had a more positive effect on human development in the United States of America (U.S.A.), while the positive effect was weaker in Nigeria. The study recommended that the Federal Inland Revenue Service (FIRS) implement strategies to improve tax compliance and expand the tax base. This could involve enhancing taxpayer education, simplifying filing procedures, and using technology to reduce leakages and inefficiencies in revenue collection. Also, the U.S. Department of the Treasury continue to maintain and enhance the efficiency of its tax collection and administration systems. By ensuring that tax revenues are effectively mobilized and allocated to key social sectors such as education, healthcare, and social welfare programs, the government can sustain the positive impact of taxation on human development.