IMPACT OF TAX REVENUE ON THE PERFORMANCE OF GOVERNMENT IN EKITI STATE (2013-2022)

This study examined the relationship between tax revenue and the performance of Ekiti State Government, using data from 2013 to 2022.Specifically, the study investigated the impact of Pay as you earn (PAYE), direct assessment, road and other taxes on the performance of Ekiti State Government in Nigeria.Expo facto research design was adopted and data were sourced from the Board of Internal Revenue of Ekiti State for 10 years, spanning 2013 to 2022.Data gathered for this study were analyzed using quantitative econometric techniques which include Pearson correlation and ARDL analysis method.Other post estimation tests like the autocorrelation test and heteroscedasticity test were also conducted.Using the most reliable and effective estimation, it was found that; direct assessment tax has a positive significant effect on the performance of Ekiti State Government with the coefficient and P-value of 0.5105 and 0.048<0.05.Road tax was found to exert a positive but insignificant effect on Ekiti state government performance to the tune of 0.3913 (p=0.241>0.05).Pay-as-you-earn tax has a positive and significant effect on government performance with the coefficient and P-value 0.8267 and 0.005.Other taxes have a positive but insignificant effect on the Ekiti state government performance captured with gross domestic products with the coefficient and probability values of 0.7348 and 0.068 respectively.Based on the analysis carried out, it was established that there was a statistical relationship between tax revenue and the performance of Ekiti state government in Nigeria.Hence, it was recommended that Ekiti State government should strictly enforce regulations on direct assessment tax to bring more taxable people into the tax net.This might enable the positive effect of direct assessment tax on capital expenditure to be significant.