ABSTRACT

This study examines the “Impact of Value Added Tax (VAT) on Economic Growth in Nigeria (2000-2018). The researcher adopted Ex-post facto research design for the study. Secondary data were used for the study, covering a period between 2000-2018. Several statistical tools such as tables, percentages and simple regression model were employed, in the analyses of data and testing of the formulated hypotheses. The study revealed that the Value Added Tax (VAT) has significant positive impact on the economic growth of Nigeria, at 5% level of significant. It further revealed that Value Added Tax (VAT) has statistical significant effect on revenue generation in Nigeria; that there is positive relationship or impact of VAT on total tax revenue. Finally, that the impact of Value Added Tax (VAT) on Real Gross Domestic Product (RGDP) in Nigeria is significant. The study recommends among other things that government should sponsor the effort of all financial regulatory bodies, to enable them draft bills that will ensure the implementation, control and evaluation of Value Added Tax (VAT). That awareness program should be arranged to educate the subjects on the need of supporting government in their programs as it affect VAT, since VAT affect the RGDP of Nigeria.     

TABLE OF CONTENTS

Title page                                                                                                                                i          

Declaration                                                                                                                              ii

Certification                                                                                                                            iii

Dedication                                                                                                                              iv

Acknowledgement                                                                                                                  v

List of Tables                                                                                                                          ix

Abstract                                                                                                                                  x

CHAPTER ONE: INTRODUCTION

1.1              Background to the Study                                                                                           1

1.2       Statement of the Problem                                                                                           5

1.3       Objectives of the Study                                                                                              6

1.4       Research Questions                                                                                                     6

1.5       Research Hypotheses                                                                                                  6

1.6       Significance of the Study                                                                                           7

1.7       Scope of the Study                                                                                                     8

1.8       Limitation of the Study                                                                                              8

2.1.3.2 Indirect Tax:                                                                                                               11

2.1.3.2. Advantages of Indirect Taxation                                                                               11

2.1.3.3  Disadvantages of Indirect Taxation                                                                          11

2.1.4    Relative Merits of Value added Tax                                                                          11

2.1.4.1. Neutrality                                                                                                                   11

2.1.4.2. Large revenue earner                                                                                                  11

2.1.4.3. Efficiency                                                                                                                  11

2.1.4.4. Broad base                                                                                                                 11

2.1.5    VAT and Its Challenges                                                                                             11

2.1.6    Value added tax as a tool for Poverty Reduction                                                      14

2.1.7    Tax Reforms in Nigeria                                                                                               15

2.1.8    Value Added Tax in Nigeria                                                                                      17

2.1.9    History of Value Added Tax                                                                                      18

2.1.10 Overview of Value Added Tax in Nigeria                                                                 19

2.1.11 Application of VAT in Nigeria                                                                                   20

2.1.12  List of Some Countries and their Values Added Tax Rates                                      23

 2.1.13 Administration of VAT in Nigeria                                                                             25

2.1.14    Overview of the Nigerian Economy                                                                         26

2.1.15    Value Added Tax and Economic Growth in Nigeria                                               27

2.1.16  VAT and Total Revenue in Nigeria                                                                           31

2.1.17  VAT and GDP in Nigeria                                                                                           32

2.2       Theoretical Framework                                                                                               33

2.2.1    Expediency theory                                                                                                      35

2.2.2.   Ability to pay theory                                                                                                   35

2.3       Empirical Review                                                                                                        35

2.4       Gap in Literature                                                                                                         38

CHAPTER THREE: METHODOLOGY

3.1       Research Design                                                                                                         39

3.2       Area of the Study                                                                                                       39

3.3       Sources of Data                                                                                                          39

3.4       Method of Data Analysis                                                                                           40

3.5       Validity/ Reliability of Data                                                                                       40

3.6       Data Analysis Techniques                                                                                           40

3.7       Model Specification                                                                                                    41

3.8       Decision Rule                                                                                                              42

CHAPTER FOUR: PRESENTATION ANDANALYSIS OF DATA

1.0              Preamble                                                                                                                     43

4.1       Analysis of Data                                                                                                         45

4.2.1    Unit Root Test (Preliminary Test)                                                                               46

4.3     Test of Hypotheses and Discussion of Findings                                                          49

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMENDATIONS

5.1     Summary of Findings                                                                                                   53

5.2     Conclusion                                                                                                                    54

5.3       Recommendations                                                                                                      54

References

Appendix