THE EFFECT OF VALUE ADDED TAX ON PRICE STABILITY IN NIGERIAN ECONOMY
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Abstract
The Federal Inland Revenue Service (FIRS), the agency in charge of tax administration in Nigeria, pointed out that VAT is a consumption tax that is relatively easy to administer and difficult to evade, and has been embraced by many countries, In this context, it becomes necessary to empirically examine the likely macroeconomic impact of VAT administration. Economically, one expect the price of VAT able goods to rise, however beyond this expected rise, business are taking advantage of the existence of VAT the increas4e price of goods and services arbitrarily. The excessive price increase according to Aruwa (2008) has further led to higher inflation in Nigeria. Given the foregoing seeks to asses the macroeconomic impact at VAT on price level in Nigeria. However from the findings of the study we can conclude that there is no significant relationship between the implementation of value added tax and economic growth in Nigeria
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