Joseph U. B. Azubike 1 , Arzizeh T. Tapang 2 & Wisdom C. Dibia 3
1, 2*, 3
Department of Accounting, College of Management Sciences
Michael Okpara University of Agriculture, Umudike
P.M.B. 7267 Umuahia, Abia State – Nigeria,
Tel: +234 8033503747; +234 8032737920

This study examines the impact of indirect tax revenue on economic growth in Nigeria. The study
uses value added tax revenue and custom and excise duty revenue as independent variables and
economic growth was proxy with real gross domestic product as the dependent variable. The study
employ secondary data collected from Central Bank of Nigeria statistical bulletin for the period
covering 1998 to 2017 for the empirical analysis using the convenient sampling techniques. The
research design is ex-post facto and data were analyzed using descriptive statistics, correlation, unit
root test, co-integration test and error correction model regression with the aid of STATA 13. The
result from the error correction model regression result revealed that value added tax (DVAT t-1 ) had
a negative and significant impact on real gross domestic product (RGDP) at 1% level of significance.
In addition, past custom and excise duty (CED t 1) had a negative and weakly significant impact on
real gross domestic product (RGDP) at even more than 10% level of significance. The Error
Correction Model (ECM-1) coefficient had a correct negative and statistically significant sign. This
shows that short-run deviation can be quickly corrected. The Durbin-Watson positive value indicates
the absence of autocorrelation in the model. The study recommended that Caution and watch ‘is’
advised on any policy direction on the collection of taxes on imports and exports in order to avoid
using the policy as a counter-incentive to the economy. This can occur when a particular policy
direction is targeted at maximum collection of CED at the expense of the economy.
Keywords: VAT, CEXD, Economic Growth, Real Gross Domestic Product, Revenue


Leave a Reply

Your email address will not be published.