Value Added Tax (Vat) Revenue and Nigeria’s Gross Domestic Product (GDP), 1994 – 2024

Okwor Emmanuel E.; Okonkwo; Josephat Onyenwe; Igwe Okoro Eze; Chukwuedo Stanley; Onyeka; Onigah Peter Oko

doi:10.56201/ijbfr.vol.12.no5.2026.pg163.179

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Value Added Tax (Vat) Revenue and Nigeria’s Gross Domestic Product (GDP), 1994 – 2024

Okwor Emmanuel E., Okonkwo, Josephat Onyenwe, Igwe Okoro Eze, Chukwuedo Stanley, Onyeka, Onigah Peter Oko

Abstract

This study examined the relationship between Value Added Tax revenue and economic growth in Nigeria over the period 1994 to 2024, with the aim of evaluating the extent to which VAT has contributed to macroeconomic performance. The investigation was motivated by Nigeria’s persistent dependence on crude oil revenue despite the steady increase in VAT collections since its introduction in 1994 as a major fiscal reform. The study adopted an ex- post facto research design. The study relied exclusively on secondary time-series data sourced from reputable institutions, including the Central Bank of Nigeria Statistical Bulletins, the National Bureau of Statistics , and the Federal Inland Revenue Service . The dataset covered annual observations from 1994 to 2024. The variables employed include Real Gross Domestic Product as the dependent variable, Value Added Tax revenue as the key independent variable, while inflation rate and manufacturing sector output were included as control variables to improve model robustness and reduce omitted variable bias. The specific objectives of the study were to examine the impact of VAT revenue on RGDP. To achieve the objective, the study employed a combination of econometric techniques, including the Ordinary Least Squares regression, Augmented Dickey- Fuller unit root test. The empirical results revealed that VAT revenue has a positive and statistically significant effect on Real Gross Domestic Product. It recommends improved tax administration, digitalization of VAT systems, expansion of the tax base, and efficient utilization of VAT proceeds for productive infrastructure and industrial development. Key words; Value Added Tax , Real Gross Domestic Product , Ordinary Least Squares , unit root test. fiscal reform

Keywords

; Value Added TaxReal Gross Domestic ProductOrdinary Least Squaresunit root test. fiscal reform

References

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Value Added Tax (Vat) Revenue and Nigeria’s Gross Domestic Product (GDP), 1994 – 2024

Abstract

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