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Abbrevia: Int. J. Bus. Financ. Econ. Res.

Language: English

ISSN: ISSN 2315-6210

DOI: 10.14412/IJBFER

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  1(4): 182-203, December 2019


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International Journal of Business, Finance and Economical Research, Vol. 1(4), pp 182-203 October 2019


(ISSN 2315-6210) 2019 International Journal of Business, Finance and Economical Research,


Full Length Research Paper


The effect of Value Added Tax on Investment, Social and Economic Development of Nigeria.


Osho Augustine E. Ph.D*, Adeyeye Michael Oluwasesan and Adeniran Taiwo Esther.


Department of Accounting, Achievers University, P. M. B. 1030, Owo, Nigeria
Principal Partner, Adeyeye Michael & Co. 30, Alabi Street, Abusoro, Off Ijoka Road, Akure, Nigeria
Department of Accounting, Rufus Giwa Polytechnic, P. M. B. 1019, Owo, Nigeria





This study assesses the effect of Value Added Tax on the Economic Development of Nigeria. The Federal Government of Nigeria introduced Value Added Tax (VAT) in 1993 to replace Sales Tax with the aim of raising/increasing her revenue base. This basically is to make funds available for investment in developmental and social projects so as to speed-up economic growth and ultimately achieve economic development. Secondary data were used in carrying out this research work, Ordinary Least Square and Granger causality technique were used to test the hypotheses formulated. The result revealed that VAT contributes significantly to the total tax revenue of the Federal Government of Nigeria, to facilitating massive investment in infrastructures that aid economic development. However, the study further revealed that even with the significant VAT contribution to total tax revenue, it has no significant impact on the economic development of Nigeria. This is because of the ineffective administration of VAT system, corruption among the official of tax authorities etc.  Consequently, it is recommended that an effective VAT administration should be sustained to cover all loopholes for corruptions, hence enables the generation of planned revenue from VAT for developmental purposes.

Keywords: Economic Development, Investment Development, Social Development, Value   Added Tax (VAT).



This is an open access article published under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

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