VALUE ADDED TAX REVENUE AND MACROECONOMIC PERFORMANCE IN NIGERIA

Abstract

This study examined value added tax revenue and macroeconomics performance in Nigeria. Specifically, the study examined the effect of value added tax revenue (VATR), on gross domestic product growth (GDP), employment generation (EMPR) and inflation (INF) in Nigeria. The ex-post facto research design was employed and secondary data was sourced from the Nigerian economy for twenty-four years (2000-2024) from the reports of the Central Bank of Nigeria statistical bulletin, the National Bureau of Statistics and the Federal Inland Revenue Service. The Pearson correlation coefficient and multiple regressions analysis were utilized with the aid of Stata12 software. Also, the Tado-Yamamoto causality test was applied to determine the direction of influence among the variables in the model. The study revealed a significant relationship between values added tax revenue, and employment generation in Nigeria. Likewise, VATR have a significant relationship with GDPR, whereas VATR and inflation rate had an insignificant relationship. The research work recommended that policymakers in Nigeria should widen the tax base to generate more revenue to provide funds for investment in critical socio-economic infrastructure and the diversification of the Nigerian economy. This will enhance the contributions of value added tax revenue to macroeconomic stability. The fiscal authorities should curb corrupt practices in the tax administration by automating the end-to-end processes from e-registration, e-assessment, e-collections and payment of tax obligations. The fiscal and monetary authorities should collaborate in the formulation and implementation of complementary policies to stimulate economic growth, generate massive employment and maintain price stability in Nigeria.