This study examines the effect of taxation on economic development in Nigeria from 2005 to 2024. The objectives are to: examine the effect of tax revenue on inflation; assess the effect of tax revenue on the Human Development Index (HDI); evaluate the effect of tax revenue on recurrent expenditure; determine the effect of tax revenue on infrastructure development; and ascertain the effect of tax revenue on unemployment. The research questions and research hypotheses are in line with the objectives. An ex-post facto research design was adopted, employing a quantitative approach with secondary data obtained from the Federal Inland Revenue Service (FIRS), Central Bank of Nigeria (CBN), and National Bureau of Statistics (NBS). Regression analysis was applied due to the longitudinal nature of the data. The findings reveal that tax revenue has a positive and statistically significant effect on inflation (β = 0.001026; p = 0.0001), HDI (β = 0.00000224; p = 0.0421), recurrent expenditure (β = 0.830636; p = 0.0000), and infrastructure development (β = 0.268726; p = 0.0000), but a negative and statistically non-significant effect on unemployment (β = -0.0000568; p = 0.1143). The results demonstrate that while tax revenue strengthens government capacity to fund social services and infrastructure, it also fuels inflationary pressures and sustains high recurrent spending. The study concludes that tax revenue plays a dual role in Nigeria, simultaneously supporting development outcomes and presenting macroeconomic challenges. It recommends prioritizing supply-side investments, curbing excessive recurrent expenditure, strengthening transparency in social spending, improving infrastructure governance, and channeling resources toward employment-generating sectors.