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

Authors

  • Adegbite LADOKE AKINTOLA UNIVERSITY OF TECHNOLOGY, OGBOMOSO.
  • Tajudeen Adejare LADOKE AKINTOLA UNIVERSITY OF TECHNOLOGY, OGBOMOSO.
  • Olaoye EKITI STATE UNIVERSITY
  • Clement Olatunji EKITI STATE UNIVERSITY

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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Author Biographies

Adegbite , LADOKE AKINTOLA UNIVERSITY OF TECHNOLOGY, OGBOMOSO.

DEPARTMENT OF MANAGEMENT AND ACCOUNTING,

Tajudeen Adejare, LADOKE AKINTOLA UNIVERSITY OF TECHNOLOGY, OGBOMOSO.

DEPARTMENT OF MANAGEMENT AND ACCOUNTING,

Olaoye, EKITI STATE UNIVERSITY

DEPARTMENT OF MANAGEMENT AND ACCOUNTING

Clement Olatunji, EKITI STATE UNIVERSITY

Ph.D DEPARTMENT OF MANAGEMENT AND ACCOUNTING

References

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Organisation for economic co-operation and development (OECD) (2007) “Consumption Taxes: the Way of the Future?” OECD Policy Brief Oct. 2007

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Usman O. A. and Adegbite T.A. (2013). Value added tax and economic growth: The Nigeria experience (1994 -2010). International Journal of Research in Commerce, IT & Management. Volume N0. 3 ,issue No. 03, pp 86-90 (March)

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Published

2015-01-31

How to Cite

Adegbite, Adejare, T. ., Olaoye, & Olatunji, C. (2015). 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), 79–91. Retrieved from https://gnpublication.org/index.php/bma/article/view/878

Issue

Vol. 1 No. 1 (2015): International Journal For Research In Business, Management And Accounting |ISSN: 2455-6114

Section

Articles

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