International Journal of Advances in Management and Economics (IJAME)

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TitleAn Empirical Investigation of the Determinants of Value Added Tax (VAT) in SouthWestern Nigeria
AuthorFasina Hassan Taiwo
AbstractDespite the various tax reforms undertaken by Nigerian Government to increase tax revenue over the year, prior statistical evidence from the literature indicates that the contribution of income tax to the Government’s total revenue remained consistently low and is relatively shrinking. The study investigated the determinants of Value Added Tax (VAT) in South Western Nigeria and the influence on revenue profile of the sampled states. Panel method was adopted covering a period of ten (10) years. Random sampling incorporated with Slovin Formula was used to select three hundred and fifty six (356) respondent tax officers, vatable persons and three hundred and fifty three (353) households of VAT rated goods on whom questionnaires were administered. VAT was found positively and significantly (𝜷= 0.7318, p = 0.05) related to revenue profile of the states. Log number of vatable industries was found to be positive (1.45334) and significant (p = 0.05), an indication that increased industrialization led to an increase in VAT. The coefficient of Log of population was negative (-0.5568789) but was significant to VAT revenue which implied that low population was associated with a decrease in VAT revenue. The study revealed that VAT has the potential of positively enhancing revenue generation of the sampled states. This could be achieved given the positive relationship with industrialization of the states and proportionality with income among the populace

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