DIRECT TAXATION AS A TOOL FOR INCOME REDISTRIBUTION

ABSTRACT

This study sought to examine the effect of direct taxation on income redistribution in Nigeria. The preliminary analysis of the data was evaluated using descriptive and correlation analyses. The regression analysis was conducted using the Ordinary Least Square method. The study found out that there is a negative and insignificant relationship between company income tax and income redistribution, there is a positive and no significant relationship between personal income tax and income redistribution. there is a positive and insignificant relationship between personal income tax and income redistribution. There is a negative and insignificant relationship between petroleum profit tax and income redistribution. This study concludes that direct taxes have both positive and negative impact on income redistribution in Nigeria. Therefore, the various types of direct taxation can have an overall effect on how money is distributed in a society. Since progressive personal income tax systems tax higher incomes more severely, they are the most effective method for reducing income disparity.