Contributory Effect of Value Added Tax to Tax Revenue in Nigeria

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Abstract

This study examines the contributory effect of value-added tax on the level of tax revenue in Nigeria using time series data spanning from 2010 Q1 to 2021 Q4. The data used in this study were sourced from the Central Bank of Nigeria (CBN) statistical bulletin. The technique used for estimation in this study was the Autoregressive Distributed Lag (ARDL) model, which was employed to examine the short-run and long-run impact of value-added tax on tax revenue. The result shows that value-added tax has a negative and insignificant contributory impact on tax revenue in the long and short run. The study recommends that government should work at increasing the level of VAT in the country until it contributes positively to the overall tax revenue and the economy.