Abstract
The study investigated the impact of value added tax on economic growth in Nigeria from 1994 to 2021. The data used was sourced from Central Bank of Nigeria. Ex-post facto research design was adopted in the investigation. Multiple regression analysis was employed, in which Auto-Regressive Distributed Lag (ARDL) model as the method of analysis was utilized in the research. The ARDL model evaluates longrun and short-run interactions among the specified variables. The unit root tests conducted using Augmented Dickey-Fuller (ADF) revealed that the time series variables used were stationary at level and the first difference, but none of the variables was stationary at the second difference. The ARDL – Bound test analysis revealed the existence of long-run equilibrium relationship between value added tax and economic growth in Nigeria within the period of the study. The coefficient of error correction mechanism was statistically significant and also negatively signed. The results equally found that value added tax is
statistically significant and positively impacted on economic growth in Nigeria in the short-run. However, in the long-run, value added tax, though positively related to economic growth, but it is statistically insignificant. Again, both inflation rate and interest rate were negatively related to economic growth and statistically insignificant in Nigeria in the long-run. However, inflation rate impacted
positively and significantly in the short-run in Nigeria. On the basis of the findings, the researcher made the following recommendations among others: Government should ensure the utilization of these taxes on productive ventures, which will stimulate the growth rate of the economy. Again, Nigeria government should ensure conducive environment for industrialization, which is the engine of the economy to thrive, so as to generate more money from tax.