Abstract

This study investigates the effects of taxation on government investments in infrastructure. Data analysis utilized descriptive methods to examine secondary data. Findings revealed that corporate income tax had no discernible impact on capital expenditure, petroleum profit tax had no significant effect on capital expenditure, and value-added tax had a significant impact on capital expenditure. We propose that governments implement transparent mechanisms for allocating tax revenue to specific capital projects based on their socio-economic impact and alignment with national development objectives. Priority should be given to initiatives with long-term benefits and substantial contributions to economic growth and social welfare. Additionally, tax laws should be continually reviewed and modified to ensure their effectiveness, equity, and ability to stimulate economic development. Finally, governments should assess the impact of tax incentives and exemptions on revenue generation and adjust them to balance promoting investment while maintaining a sustainable revenue stream for capital initiatives.