Abstract:

The study was designed to evaluate the impact of value added tax reforms on economic development of Nigeria (1994-2014). The research design adopted in this study was the ex-post facto research design. To achieve the objectives of this study, two specific objectives and two research questions were raised while one research hypotheses were formulated. The independent variable was measured by Value added tax (VAT), while economic development was proxy by gross domestic product (GDP). The study made use of secondary data which were collected from the Central Bank of Nigeria (CBN) and Federal Inland Revenue Service (FIRS). Data obtained were analyzed using Chow test statistical tool with the aid of Eview version 7.0. Findings showed that value added tax reforms actually impacted positively on the economic development. Based on the findings, the study recommended that Government should encourage production and service sectors of the economy since it is established by the study that tax reforms have
positively impacted on the economy in both the pre-reform and post re-reform periods especially in the area of gross domestic product. Value added tax rate should be increased from five percent (5%) to fifteen percent (15%) since the study has established that there was a significant relationship between the joint contribution of the pre and post-reform periods of Value added tax reform and gross domestic product.


Key words: Economic Development, Gross Domestic Product, Nigeria, Tax Reforms, Value Added Tax

Introduction
The Nigerian tax system has experienced series of reforms since 1904 to date (Ogbonna & Appah, 2012). The effects of the various reforms in the country are as follows: introduction of income tax in Nigeria between 1904 and 1926; grant of autonomy to the Nigerian Inland Revenue Service 1945; the Raisman Fiscal Commission of 1957; Formation of Revenue Board in 1958; the promulgation of the Petroleum Profits Tax Ordinance No. 15 of 1959; the Promulgation of Income Tax Management Act 1961; the tax force on tax administration of 1978 headed by Alhaji Shehu Musa which brought about the introduction of withholding tax regime; establishment of Federal Inland Revenue Service (FIRS) as the operational arm of the then Federal Board of Inland Revenue (FBIR); introduction of Value added tax (VAT) in 1993 and tax policy and

administration reforms amendment 2001 and 2004 (Bassey, 2013).


The latest tax reforms embarked upon by government include the: the following enactments by the National Assembly:

Capital Gains Tax Act, 2004; Companies Income Tax Act, 2004; Companies Income Tax (Amendment) Act 2007; Education Tax Act, 2004; Industrial Development Act, 2004; Personal Income Tax Act 2004 and Personal Income Tax (Amendment) Act, 2011. Others are Federal Inland Revenue Service (Establishment) Act, 2007; Petroleum Profits Tax Act, 2004; Stamp Duties Act, 2004; Value Added Tax Act, 2004; Value Added Tax (Amendment) Act, 2007 and National Information Technology Agency Act, 2007 (Bassey, 2013). The several tax reforms were designed to broaden the tax base, reduce the tax burden on tax payers, restore the ...>>>>

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