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ABSTRACT
Value added tax (VAT) is a consumption tax, levied at each stage of the consumption chain and borne by the final consumer of the product or service. The administration of VAT is relatively easy, unselective and difficult to evade. The study has been preoccupied with investigating the impact of VAT on economic growth in Nigeria. The study reveals that VAT is negatively influential in boosting the Nigerian economy, as it not a major revenue outlets of the federal government in recent times, however, maladministration of fiscal funds has led to its ineffectiveness, in boosting the economy, as seen from the insignificant relationship between VAT and RGDP. Ordinary Least Square technique was employed to test the hypotheses formulated.. To boost tax revenue we need to boost revenue collected from VAT. This can be achieved not necessarily by increasing the VAT rate of 5% percent but by closing every VAT revenue leakage, sensitizing the managers of companies operating in Nigeria on the need to remit the VAT revenue collection and proper training of the Federal Inland Revenue staff in charge of VAT revenue collection. The study recommends that sensitization of the public on the need to tax conscious, especially on the importance of tax in meeting the macroeconomic objectives of the economy, such employment generation, high level of social investment, the monetary and fiscal authorities should ensure to formulate feasible expenditure switching policy which will make the administration of VAT friendly and conducive to the people, overhaul of the tax office of the bad eggs, who mal-administer public funds for private gains hence it would continually remain insignificant in boosting the economy, hence the government should instill fiscal discipline, even amongst the administrators.
