The Impact of Value Added Tax on Revenue Generation in Nigeria

Abstract

This research work studied the impact of value added tax on revenue generation in Nigeria. The study is aimed at the appraisal of revenue generation in Nigeria. Secondary data were used in this study, the data were collected from CBN statistical bulletin also gathered from journals and textbook that is related to the research topic, the study collected data from 1994 to 2012. The result of the analysis showed that that there is significant relationship between value added tax and consolidated revenue generation in Nigeria. At 5% level of significance, the F-statistics computed value is 1186.6 which is significant at 5% significant level, we accept the alternate hypothesis and conclude that there is significant relationship between value added tax and consolidated revenue generation in Nigeria. However, for Nigeria to attain its economic growth and development, she must be able to generate enough revenue in order to meet up with the challenges of her expenditures in term of provision of social amenities and the running costs of the Government. The result of this study indicates that if more goods and services are taxed, the revenue base of the country will increase. Also value added tax bases be widened to bring the informal sector into the value added tax net so as to stem possible evasion even by the so faithfully complying under the old rate.