The goal of the study was to determine the effect of direct taxes on inflation and unemployment in Nigeria for the period 1970 to 2024 using CBN and world bank data publications for Nigeria. Direct taxes were proxied as company tax, petroleum profit tax, education tax and personal income tax while dependent variables are inflation and unemployment. VAR method of vector error correction model was used. Shocks were introduced to consider the period of oil boom, military regime, civilian, covid-19 and depression to account for changes within the period. Granger Causality test was also conducted to establish direction of relationship while post estimation analysis was also done. Education tax, personal income tax and petroleum profit taxes all have significant impact on inflation and price changes in Nigeria. Company income taxes however do not significantly influence inflation in Nigeria. All direct tax components in the study have significant effect on unemployment in Nigeria. However, while education tax, personal income tax and petroleum profit taxes reduce unemployment, company income taxes increase the rate of unemployment in the country. Effects of taxes on unemployment and inflation are more long-term rather than short-term. While the short run effects are mostly insignificant, the long run effects are highly significant. Based on findings we recommend tax system for companies should be designed and implemented in a way that will minimize distortions and tax administration inefficiencies taking into account the constraints that may arise from tax administration. Government should amend tax laws to enhance better micromanagement and regulation of tax systems to mitigate unemployment.