Abstract

This study examined  the effect of indirect  taxes on economic  growth  of Nigeria, utilizing  time series  data spanning  a 5year period, from2013   to 2017.   The data collected from  secondary  sources, were analyzed and tested for  unit root, using the Augmented   Dickey-Fuller    test.   Consequently,    the   study   utilized    the   Error Correction Model to evaluate the impact of VAT, PPTand   CED on the RGDP.  The findings  revealed  that  VAT and PPT  exert a positive  and significant  relationship on the RGDP.  It was  also  revealed  that  CED of two period  lags has a positive relationship  with RGDP  and  VAT of two-period  lags has a positive  relationship with  RGDP   and   VAT  of  two-period   lags  showing   a  negative   but  significant relationship  with RGDP.  On the basis of these findings,   it is recommended  that some   caution   on   the  part   of   the   government    is   required    to   identify   all administrative  loopholes  for   linkages  to plug  and  to  continue  to maximize  the contribution  of  VAT revenue  to economic  growth.  This  is important  when  it is realized  that any action  taken on  VAT, as it relates  to RGDP  will take a year to become effective  while  taking  two years  to slow down  the economy.  In addition, and to achieve  an optimum policy  thrust, there must be commitment  and honesty on the part of the agents of VAT.,  PPT.,  and CED with respect to its collection and payment,·  special  remuneration,   training and retraining  of these agents,  all in an attempt to enhance impact of these taxes on Economic growth.