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The Effect of Value-Added Tax on Economic Growth of Nigeria


Monica Adele Orisadare
Kazeem Fasoye

Abstract

The paper examined the effect of VAT on economic growth in Nigeria between 1994 and 2020 using consumer price index (CPI) as a threshold. A technique of Threshold Vector Autoregressive (TVAR) was employed and the results reveal that a VAT above the 10 percent threshold value endangers the economy while a VAT below the 7.59 percent threshold value does not harm the economy; rather, it improves people's well-being.  It is therefore recommended that Nigerian economy should maintain the lower VAT threshold to cushion the effect of ever rising CPI on the citizens.


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eISSN: 2453-5966
print ISSN: 1821-8148