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Nexus Between Value Added Tax And Economic Growth In Nigeria

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This study investigated the effects of VAT revenue on Nigerian economic growth from 1999 to 2019. Ex-post facto and survey research designs were adopted to investigate various contributions of value added tax revenue to the Nigeria Gross Domestic Product over the period of 20 years. Secondary data were obtained from CBN, FIRS and NBS while ordinary least square regression model was employed to analyze the effects of value added tax revenue on Gross Domestic Product. The result showed that GDP is strongly impacted upon by VAT revenue. The simple regression analysis also showed that VAT revenue has positiveeffects on the economic growth of the country as measured by the GDP.The coefficient of the independent variable (â1) shows that a 1% increase in VAT revenue will cause a 0.84% increase in GDP. Also, the R-squared showed that about 97% variations in GDP can be attributed to VAT revenue, while the remaining 3% variations in GDP are caused by other factors not included in this model. This shows a strong explanatory power of the model. The regression result is statistically significant because it is less than 5%, the level of significance adopted for this study. The study therefore concluded that value added tax revenue has significant and positive effect on Nigeria's economic growth, hence government need to reposition the VAT administrative system and sufficiently equip them to deal with complexities of technological advancement in global commerce.

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  • Joshua Adewale , Adejuwon, & Risikat Arike, Ojo,, 2021. "Nexus Between Value Added Tax And Economic Growth In Nigeria," Multidisciplinary Journal of Management Sciences, Association of Forensic Accounting Researchers (AFAR), vol. 3(1), pages 113-130, June.
    • Handle: RePEc:ris:amjoms:0031
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