Empirical Analysis of Indirect Taxation and Economic Development of Nigeria
Keywords:
Indirect tax, Value Added Tax, Customs and Excise, NigeriaAbstract
Using time series data of 17years period (2000- 2016), this study investigated the impact of indirect tax on economic development of Nigeria. Employing the ordinary least square multiple regression analysis to estimate the model specified. Value Added Tax (VAT) and Customs and Excise Duties (CED) were adopted as the dependent variables while Human Development Index (HDI) represents the dependent variable. The data were analyzed using Multiple Regression Analyses in line with the research objectives of the study. The evidence, however, shows that indirect tax through Value Added Tax has a positive and significant relationship with Human Development Index in Nigeria within the year under study. It was also discovered that custom and exercise duties had positive impact on the human development index. Based on the result, it was concluded that indirect tax collected through VAT and CED by the federal government impact positively on economic development of Nigeria. It is recommended that the government should create an enabling environment for and sensitize tax payers on the need for tax payment and punishment for non-compliance. This will go a long way in boosting the economic growth and development. Moreover, incentives should be provided with the tax payers to encourage them to pay their taxes. Tax authorities should offer tax education for its workforce and other related incentive.
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