Value added tax (VAT) is a consumption tax, levied at each stage of the consumption chain and borne by the final consumer of the product or service. The administration of VAT is relatively easy, unselective and difficult to evade. The study investigated the impact of value added tax on the economic growth of Nigeria. Ordinary Least Square technique was employed to test the hypotheses formulated. The result shows that VAT contributes significantly to the total tax revenue of government and by extension the economic growth of Nigeria. VAT revenue growth had consistent increase though it was not that explosive. To boost tax revenue we need to boost revenue collected from VAT. This can be achieved not necessarily by increasing the VAT rate of 5% percent but by closing every VAT revenue leakage, sensitizing the managers of companies operating in Nigeria on the need to remit the VAT revenue collection and proper training of the Federal Inland Revenue staff in charge of VAT revenue collection.
Keywords: VAT Revenue, VAT System, VAT Target, economic growth
