An Evaluation of the Contribution of Value Added Tax (Vat) To Resource Mobilization in Nigeria

Abstract

Taxation as an instrument of fiscal policy has been a source of revenue to nations. This work sets to evaluate the contributions of Value Added Tax (VAT) to resource mobilization in Nigeria. The Ordinary Least Square (OLS) method of simple regression analysis was employed to determine the relationships between VAT and Real Gross Domestic Product (RGDP), VAT and Current Revenue (CREV), VAT and Internal Revenue (INREV); also the impact of VAT on RGDP, CREV and INREV. The general conclusion is that the VAT is an ideal form of taxation in Nigerian tax system and has significantly contributed to resource mobilization as well as capital formation to the economy. The recommendation is that all that are involve (both payer and administrator) should be adequately motivated to enable each in his/her own sphere perform well to ensure higher levels of efficiency and effectiveness.

Key words: Revenue, Taxation, Resource mobilization, Sales tax, Capital formation, Consumption.