ABSTRACT

The objective of this study is to determine the effect of value added tax on the performance of manufacturing firms in Nigerian. Ex post facto research design was adopted for this study. In measuring manufacturing firms, Net profit margin (NP), Return on Capital Employed (ROCE) and Earnings per share (EPS) were used in the study for the period 1993 to 2018. Secondary data method was adopted in obtaining data on value added tax, Net Pro/It Margin, Return on Capital Employed and Earnings Per share. These data were obtained from CBN statistical bulletin, Nigeria Stock Exchange, Federal Inland Revenue Services and journals. The data obtained were analyzed using Simple regression analysis. Findings shows that value added tax has significant effect on the performance of Manufacturing firms Nigeria. It was also discovered that VAT has a negative relationship with Net profit margin, Return on Capital Employed and Earnings per share of manufacturing firms. Finally, we found that increase in VAT will decrease in ROCE level, NP and EPS of manufacturing firms in Nigeria. The implication of these findings is that Nigerian manufacturing firms will experience slow development. Based on these findings, the researcher recommends that Nigerian manufacturing firms should put in place fiscal policies that will enhance investment in industries and technology which will stimulate overall productivity growth.