Value Added Tax and Infrastructural Development in Edo state
Faculty
Department
Year of Publication
upload
Publication Type
Abstract
This study investigates the relationship between Value Added Tax (VAT) revenues, inflation, and infrastructural development in Edo State, Nigeria, over the period 2015– 2024. VAT, a consumption-based tax introduced in Nigeria in 1993, has become a key
source of non-oil revenue, supporting investments in health, education, and agriculture. Despite steady VAT allocations, infrastructure outcomes remain uneven, raising questions about the efficiency of resource utilization. The study aims to assess the contribution of VAT revenue to infrastructural development, examine the role of inflation, and evaluate how effectively fiscal resources are transformed into tangible outcomes. Secondary data were obtained from Edo State Citizens Accountability Reports, FAAC disbursement records, Audited Financial Statements, and the Central Bank of Nigeria Statistical Bulletin. Short-run dynamic modeling was employed to analyze the relationship between VAT revenue, inflation, and infrastructure development. Findings show that VAT revenue is a highly significant determinant of infrastructure, with each additional billion Naira generating approximately 194.455 million Naira in development outcomes, while inflation is statistically insignificant. Transformation efficiency is approximately 19.4%, indicating gaps in financial management and governance. The study concludes that strategic planning, enhanced public financialxiii management, diversified funding sources, and effective institutional capacity are essential to maximize VAT’s impact on sustainable infrastructure development in Edo State.
source of non-oil revenue, supporting investments in health, education, and agriculture. Despite steady VAT allocations, infrastructure outcomes remain uneven, raising questions about the efficiency of resource utilization. The study aims to assess the contribution of VAT revenue to infrastructural development, examine the role of inflation, and evaluate how effectively fiscal resources are transformed into tangible outcomes. Secondary data were obtained from Edo State Citizens Accountability Reports, FAAC disbursement records, Audited Financial Statements, and the Central Bank of Nigeria Statistical Bulletin. Short-run dynamic modeling was employed to analyze the relationship between VAT revenue, inflation, and infrastructure development. Findings show that VAT revenue is a highly significant determinant of infrastructure, with each additional billion Naira generating approximately 194.455 million Naira in development outcomes, while inflation is statistically insignificant. Transformation efficiency is approximately 19.4%, indicating gaps in financial management and governance. The study concludes that strategic planning, enhanced public financialxiii management, diversified funding sources, and effective institutional capacity are essential to maximize VAT’s impact on sustainable infrastructure development in Edo State.
Supervisor(s)
co-supervisor