Nigerian Journal of Banking and Financial Issues (NJBFI)

Effect Of Revenue Generation Through Value Added Tax And Other Taxes On Economic Growth in Nigeria

Abstract

This study examined the effect of revenue generation through Value Added Tax (VAT) and other taxes on the economic growth of Nigeria. Data were gathered through secondary sources from the Central Bank of Nigeria (CBN), Nigerian Exchange Group (NGX) and National Bureau of Statistics (NBS) for the analysis. The study adopted ex-post factor research design to gather data that were already established. Regression and Correlation Analyses were used in the study. The findings revealed that there is significant relationship between Value Added Tax (VAT) and Economic Growth of Nigeria with (r2 = 0.974). Also, there is a significant relationship between Customs and Excise Duties (CED) and Economic Growth of Nigeria with (r2 =0.765). There is also significant relationship between Companies Income Tax (CIT) and Economic Growth of Nigeria with (r2 = 0.857). Therefore, the study concluded that revenue generation through Value Added Tax (VAT) has significant impact on Economic Growth of Nigeria. The study recommended that the government must guarantee that the incomes earned by VAT and other taxes be used effectively to improve the standard of living of Nigerian citizens. This could be accomplished by closely monitoring the incomes received by the government. Also, it would go a long way towards alleviating the problems of VAT collection and administration because when the government fulfills its part, citizens with not fail to pay taxes. Nigerian government should reform the Customs and Excise Duties in order of stimulate investment and therefore achieve adequate economic growth.