ABSTRACT

 This study focuses on the effect value added tax on economic development in Nigeria. Despite the enormous revenue that flows into the government treasury, there are critics who argue that the incidence ofVAT like other indirect tax is regressive. Data were collectedfrom secondary sources using an ex-postfacto research design. The data collected were then tabulated and analyzed using the simple regression analysis. The empirical results showed that the value of Value Added Tax has a positive significant implication on both economic development, and the Total Tax Revenue in Nigeria. Conclusively, it should be taken into consideration that Nigerian’s economic growth is not only influenced by Value Added Tax but by other factors which were alsoput into consideration in this research, suchfactor as, Total Tax Revenue. It is recommended that the management and administration of Value Added Tax in Nigeria should be done in a manner that it will not have adverse effect on the economy such as distorting the forces of demand and supply. Also though Value Added Tax has a positive implication on the economy, effortshould be made to exempt infant industriesfrom Value Added Tax in order to encourage them to grow. Finally, the revenue generated from Value Added Tax should be used for infrastructural development ofthe country in order to increase the economic growth ofthe country.