ABSTRACT
The empirical study thoroughly investigated and examined the relationship between indirect taxes and economic growth in Nigeria over 38 years, from 1984 to 2022. Specifically, the study focused on the impact of value-added tax (VAT), customs, and excise duties on the economic growth of Nigeria. Secondary data was utilized, with Gross Domestic Product (GDP) serving as the dependent variable to measure economic growth, while customs and excise duties (CED) represented the independent variables which were sourced mainly from the Central Bank of Nigeria (CBN) Statistical Bulletin, National Bureau of Statistics (NBS), Federal Inland Revenue Service (FIRS), the World Bank, and other credible sources. The ex-post facto research design method was employed for this study because it allowed the researcher to analyze trends and patterns of changes that had already occurred. . In the course of the empirical investigation, various advanced econometric techniques like the Augmented Dickey-Fuller (ADF) test, the Unit Root Test, the Johansen Co-Integration test, the Error Correction Model, and Diagnostic test were employed and their results were revealed. The result of the Error Correction Model revealed that value-added tax is not a statistically significant factor that affects real gross domestic product in the short run at a 5% level of significance. In the long-run, customs and excise duties were found to have a negative relationship with economic growth ,while it also revealed that there was a positive relationship between value-added tax and economic growth. Based on these findings, this study recommends that the collection of customs and excise duties should be monitored effectively by the government to ensure all amount is collected and admitted. Compliance with Value-added tax should be ensured by government revenue because the revenue generated from VAT contributes significantly to economic growth. KEYWORDS: Indirect taxes, Value-added tax, Customs and excise duties, Gross Domestic product, Economic growth
