Journal of Research in Economics and International Finance

Journal of Research in Economics and International Finance (JREIF) (ISSN: 2315-5671)
Vol. 5(1) pp. 001 -007, January, 2016
Copyright © 2016 International Research Journals

 

Review

On The Tax Implications of Capital Flight: Evidence from Nigeria 

Uguru Leonard C., PhD
Department of Accountancy, Ebonyi State University, Abakaliki
Author e-mail address: uguruleonard@yahoo.co.uk

ABSTRACT

The study offers further documentation of the effect of capital flight on tax revenue in Nigeria. After a theoretical and empirical literature review of the subject, an Ordinary Least Square model is employed based on time series data quantifying capital flight under the hot money or balance of payment approach. It is found that a unit increase in capital flight will lead to a 0.02 or 2% decrease in tax revenue. Consequently, policy measures discouraging capital flight, like placing a limit on the repatriating percentage of local profit, would improve tax revenue in Nigeria. 

Keywords: Capital flight, Tax revenue, Hot money measure, Nigeria 

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