EMPIRICAL INVESTIGATION OF INDIRECT TAXES AND ECONOMIC GROWTH IN NIGERIA

Abstract

This study empirically investigate the impact of indirect tax and value added tax on economic growth in Nigeria. The data for the study were sourced from Central Bank of Nigeria (CBN) Statistical Bulletin, Organisation for Economic Cooperation and Development (OECD) website, Nigerian Customs Service and Federal Inland Revenue Service. The empirical result revealed statistically insignificant but negative relationship between indirect tax and real GDP. Also the study revealed statistically insignificant but positive relationship between VAT and real GDP. This study therefore recommend that government should put in place necessary measures and policy to improve the real GDP, so that tax base can increase, which would lead to increase in revenue to the government to perform her objectives. To achieve this government need to create an environment that is business friendly. Government also need to encourage entrepreneurship in the economy, by doing so, the tax base would also increase and revenues accruing to government would also increase.