Value Added Tax (VAT) and Its Impact on Growth of Adamawa State

Abstract

The paper investigates the impact of value added tax (VAT) economic growth and development of Adamawa state from 2001 to 2014. Data for the study were sourced through CBN statistical Bulletin and Adamawa state Annual budget report and analyzed through the use of Ordinary Least Square Technique. The results of OLS revealed that increase in total actual revenue and value added tax (VAT) raised economic growth of Adamawa state. The coefficient of total actual revenue and value added tax (VAT) were statistically significant and consistent with the theoretical expectation. The F-statistics values in this study indicated that total actual revenue and value added tax (VAT) were jointly and significantly affecting economic growth of Adamawa state at 1 percent significant level. It can be seen from the result that economic growth of Adamawa state was highly susceptible to change in VAT than change in total actual revenue as shown by their coefficients in Table 4.0.1. This study also found that the major factor affecting economic growth of Adamawa state was value added tax (VAT) administration. This study, therefore, recommended that more attention should be directed towards effective administration of VAT in order that meaningful growth and development can be achieved in the state. This study also recommended that government and its relevant authorities should provide conducive environment for effective revenue generation in the state.

Keywords: VAT, expenditure, economic growth