Economic Crisis Management Through Taxation Adjustments in Nigerian Construction Projects

In Nigeria, taxation serves as a mandatory financial instrument for national interests, wealth redistribution,and economic stability. This study investigates the impact of tax adjustments on mitigating economic crisesin the construction sector from 2020 to 2024. The research examines project viability, job creation, andcontinuity, evaluating amendable levy arrangements, identifying profitable financial approaches, anddiscussing challenges in implementing these strategies to enhance sectoral resilience. The study employsthematic analysis, comparative regional policy evaluation, and case studies to highlight issues such asconstruction costs, investment trends, government revenue fluctuations, project viability, employment,compliance, and macroeconomic effects. Tax revenues in the construction industry steadily increased from₦10 billion in 2020 to a peak of over ₦50 billion in 2023, driven by aggressive tax adjustments, improvedcompliance, and economic recovery. A slight decline to ₦42.5 billion in 2024 suggests the introduction oftax relief measures or reduced construction activity. The construction indicator showed consistentimprovement, reaching baseline efficiency (100%) in 2024, reflecting recovery from inefficienciesobserved in 2020 (123%) and 2021 (118%). Nigeria's GDP growth fluctuated, with a significantcontraction in 2021 (-1.79%) during the post-pandemic recovery, followed by stabilization at 2.86% in2024. Inflation rates, however, rose steadily, from 11.40% in 2020 to 24.66% in 2024, imposingmacroeconomic challenges. Key reforms, such as the 2020 Finance Act, which increased VAT to 7.5%,contributed significantly to higher revenues, with VAT collection peaking at 45.02% in 2023 beforestabilizing at 19.10% in 2024. These findings underline the necessity of balanced tax policies to sustaineconomic stability, emphasizing their role in mitigating crises and ensuring the viability of constructionprojects. The insights aim to guide Quantity Surveyors in incorporating tax adjustments into cost estimates,enabling adaptive strategies during economic downturns while fostering sectoral and national resilience.