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Value Added Tax (VAT) Revenue and Imported Goods: Nigeria Experience

Author

Listed:
  • Tajudeen Adejare Adegbite
  • Felix Ebun Araoye

Abstract

This study evaluated the effect of imported goods on VAT revenue from 1994 to 2018 in Nigeria. This study also assessed causality direction amid VAT revenue, imported goods (import), exchange rate (EXCH), interest rate (INTR) and inflation rate (INFL) actively employing Units root, VECM, Granger causality, and Johansen co-integration tests. The Results showed that import (LOGIMPORT) had positive significant effect on Value added tax revenue both in the short run (LOGVAT) and in the longrun. Also, exchange rate and inflation rate have positive insignificant influence on VAT revenue also; there exist bi-directional causality between value added tax revenue and imported goods. IMPORT granger- cause VAT, VAT granger-cause IMPORT. Conclusively, imported goods and services have positive short run and long run significant influence on value added tax revenue in Nigeria.

Suggested Citation

  • Tajudeen Adejare Adegbite & Felix Ebun Araoye, 2020. "Value Added Tax (VAT) Revenue and Imported Goods: Nigeria Experience," Academic Journal of Economic Studies, Faculty of Finance, Banking and Accountancy Bucharest,"Dimitrie Cantemir" Christian University Bucharest, vol. 6(3), pages 22-29, September.
    • Handle: RePEc:khe:scajes:v:6:y:2020:i:3:p:22-29
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    More about this item

    Keywords

    VAT; revenue; imported goods; exchange rate; Interest rate; inflation;
    All these keywords.

    JEL classification:

    • H27 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other Sources of Revenue
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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