ABSTRACT

 This study focuses on the effect value added tax on economic development in Nigeria. Despite the enormous revenue thatflows into the government treasury, there are critics who argue that the incidence of VAT like other indirect tax is regressive. Data were collectedfrom secondary sources using an ex-postfacto research design. The data collected were then tabulated and analyzed using the simple regression analysis. The empirical results showed that the value of Value Added Tax has a positive significant implication on both economic development, and the Total Tax Revenue in Nigeria. Conclusively, it should be taken into consideration that Nigerian’s economic growth is not only influenced by Value Added Tax but by otherfactors which were also put into consideration in this research, such factor as, Total Tax Revenue. It is recommended that the management and administration of Value Added Tax in Nigeria should be done in a manner that it will not have adverse effect on the economy such as distorting theforces ofdemand and supply. Also though Value Added Tax has a positive implication on the economy, effort should be made to exempt infant industriesfrom Value Added Tax in order to encourage them to grow. Finally, the revenue generatedfrom Value Added Tax should be usedfor infrastructural development of the country in order to increase the economic growth of the country.