VALUE ADDED TAX AND ECONOMIC GROWTH: AN EMPIRICAL STUDY OF NIGERIAN ECONOMY

Abstract

This study examined the effect of value added tax on economic growth in Nigeria. This study used a longitudinal research design. The choice of design is based on the idea that the method offers the observation of trends and patterns of change. This was important in determining the potential impact of tax structure revenues on economic growth over time. The study used time series data from the period 1999-2021. Relevant data was collected from Central Bank of Nigeria Statistical Bulletin. The study employed ARDL Regression Analysis to test the hypothesis. The research shows that VAT has a significant negative impact on Nigeria's economic growth over the period under review. Based on the result obtained from the VAT variable, the authors not only recommend lowering tax rates, but also indicate the need to change to innovative development methods that promote faster and more stable economic growth. Therefore, an effective national regulatory and business support system should be a priority for the Nigerian government to ensure successful innovation development.