EFFECTS OF VALUE ADDED TAX ON THE GROWTH OF THE ECONOMY IN NIGERIA

This study examines the effect of Value Added Tax (VAT) on economic growth in Nigeria, using Gross Domestic Product (GDP) as a key indicator of economic performance. The persistent volatility of crude oil revenue has heightened the need for sustainable non-oil revenue sources. making VAT a critical fiscal instrument in Nigeria's tax system. The study specifically investigates the influence of VAT revenue, VAT rate, VAT compliance level, and VAT administrative efficiency on Nigeria's GDP. Relying on an ex post facto research design, the study utilizes secondary data obtained from credible sources such as the Federal Inland Revenue Service (FIRS), the National Bureau of Statistics (NBS), and the Central Bank of Nigeria (CBN) over a ten-year period spanning 2015 to 2024. Quantitative techniques are employed to analyze the relationship between VAT- related variables and economic growth. The findings are expected to provide empirical evidence on the extent to which VAT contributes to Nigeria's economic development, while also highlighting the challenges associated with VAT administration and compliance. The study further evaluates the potential regressive effects of VAT and its implications for consumption, investment, and income distribution. By offering insights into the efficiency and effectiveness of VAT as a revemie- generating mechanism, the research contributes to policy discussions on fiscal diversification, tax reform, and sustainable economic growth in Nigeria. The study concludes that improving VAT compliance, strengthening administrative efficiency, and ensuring equitable tax policies are essential for maximizing the growth-enhancing potential of VAT in Nigeria