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Effect of Indirect Taxes on Economic Growth in Nigeria

Avendei, Mathias

Abstract

This study examined the effect of indirect taxes on economic growth in Nigeria from 2003 to 2018. The ex-post facto research design was adopted for this study while secondary data were extracted from the central bank of Nigeria Statistical bulletin from 2003-2018. The descriptive statistics and multiple regression were used to test the postulated null hypotheses with the aid of EViews10 statistical software. Value-added tax and custom and excise duties were measures of Indirect taxes while gross domestic product and human development index were the measures for economic growth. The study revealed a negative and insignificant effect of value- added tax on gross domestic product. It also revealed a positive and significant effect of value- added tax on human development index. Also, it revealed a positive and insignificant effect of custom and excise duties on gross domestic product. Finally, the study revealed a positive and insignificant effect of custom and excise duties on human development index. The study therefore recommended that the government should put in place mechanism to close up the loopholes in the VAT collection system since its effect on gross domestic product is negative and insignificant. Furthermore, the government through its agency Nigerian custom service should computerize all its tax collection processes with adequate internal control system so as to boost revenue generated from custom and excise duties.

References

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