The Co- Integration Analysis of Effect of Value Added Tax and Excise Duties on Economic Growth in Nigeria

Authors

  • Adegbite Tajudeen Adejare DEPARTMENT OF MANAGEMENT AND ACCOUNTING, LADOKE AKINTOLA UNIVERSITY OF TECHNOLOGY, OGBOMOSO. OYO STATE, NIGERIA.

DOI:

https://doi.org/10.53555/bma.v1i1.1669

Keywords:

Value Added Tax (VAT); Co-integration; Economic growth; Excise Duties; Granger causality

Abstract

This study examined the co-integration analysis of effect of value added tax and excise duties on economic growth in Nigeria. It also looked at the direction of causality among value added tax excise duty, interest rate, exchange rate and economic growth employing the method of Johansen co-integration and the Granger causality tests using data spanning the period 1994- 2014. Results showed that VAT has positive significant impact on GDP in the short run but has negative impact on GDP in the long run with (  = 1.296417; t=7.41; P>|t|= 0.000) and ( =- 13.38159; z=-3.60 , P>|z|= 0.000) respectively. Also, VAT does not granger cause GDP. Excise duty impacted GDP negatively in the short run but positively in the long run with (=-1.111069; t=-5.16, , P>|t|= 0.000) and ( =37.54469; z = 4.07; P>|z|= 0.000) respectively. It is recommended that, once the value added tax impacted economic growth positively in the short run but negative in the long run, government should increase the rate of value added tax in Nigeria, this will in turn boosting the revenue generation in Nigeria. Also, government should increase excise duty on tobacco and alcoholic so as to have positive significant impact on economic growth in the short run.

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References

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Published

2021-07-31

How to Cite

Adejare, A. T. (2021). The Co- Integration Analysis of Effect of Value Added Tax and Excise Duties on Economic Growth in Nigeria. International Journal For Research In Business, Management And Accounting, 1(1), 44–53. https://doi.org/10.53555/bma.v1i1.1669

Issue

Vol. 1 No. 1 (2016): International Journal For Research In Business, Management And Accounting

Section

Articles

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