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ABSTRACT
The study examined the impact of value added tax on revenue generation in Nigeria, The variables utilised for this study were value added tax, custom and excise duty and stamp duty
This study employs data spanning between the periods 1995 to 2020, by employing the use of Augmented Dickey Fuller test, Co integration test and Error Correction technique. This study adopts the expost-facto research design. This study also adopts a multiple regression analysis with Ordinary Least Square (OLS) econometric technique. The data utilized were secondary data which were collected from the publications of the Central Bank of Nigeria (CBN) Statistical Bulletins and National Bureau of Statistics (NBS).
The Empirical results indicated that value added tax has a positive and significant effect on revenue generation. The ECM results also show that about 77 percent of the discrepancy between the actual and the long run or equilibrium value of revenue generation as measured by total federal collected revenue is corrected or eliminated each year. The study therefore recommends that government should ensure that VAT revenue generated is effectively utilised for the development of the economy, clearly visible to tax payers to see and appreciate. This will enhance compliance and reduce tax avoidance and evasion which is common under the present VAT regime. Finally, the workforce of the Federal Inland Revenue Service (FIRS) the body charged with the collection of VAT in Nigeria should be increased. The capacity of FIRS staff should equally be enhanced in terms of training and re-training for an effective VAT administration.
