Impact of current components of value added tax revenue on economic performance of developing economies: the nigerian experience from 1994 to 2024

This study examined the impact of current components of value added tax on economic performance of developing economies with emphasis on Nigeria, covering the period of 1994 to 2024. It sorts to ascertain the impact of import VAT, foreign VAT, local VAT and total VAT revenue on economic performance of Nigeria proxied by gross domestic product. The study was anchored on laffer curve and ability to pay theories. Ex-post-facto research design was adopted, while secondary data were obtained from Nigeria Bureau of statistics and the CBN Statistical Bulletin. The data were analyzed using OLS approach based on Multiple Regression. The results revealed that there is significant positive impact of import, foreign and local VAT on economic performance of Nigeria. It also showed that there is significant positive impact of total VAT revenue on economic performance of Nigeria. The study concluded that these independent variables have causal effect on economic performance of Nigeria, given that both the independent variables have a p-value of 0.0133, 0.0324, 0.0365, and 0.0006 respectively at the long-run, which is less than 0.05 level of significance. The study recommends Nigerian government to ensure that the supply chain of local, import (goods) and foreign services are automated through the use of electronic devises that will guarantee accurate documentation in order to boost VAT administration at all levels. Also,the need for Tax authorityto embark on aggressive sensitization, training and retraining of all registered foreign VAT payers on how to calculate foreign VAT returns is commendable.