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Abstract
The board objective of this study is to examine the impact of Value Added Tax on consumption level in Nigeria. Specifically, this study investigated the effects of value added tax on household purchasing decisions and consumption, saving and investment behaviour among households in Nigeria, and poverty levels and household welfare in Nigeria.
The study used a primary data collected from 100 households in Ugbowo Benin-city, Edo State. Various statistical and econometric tool were applied to analyze the data. The results revealed that value-added tax has a negative and statistically significant impact on household purchasing decisions and consumption and saving and investment behaviour among households in Nigeria, but a positive and statistically significant impact on poverty levels and household welfare in Nigeria.
Based on the findings, the study recommended that government should consider reducing VAT rates on essential goods and services to enhance consumer purchasing power and stimulate aggregate demand and policymakers should introduce targeted tax reliefs or exemptions for savings and investment-related products to encourage household financial growth despite VAT pressures.
The study used a primary data collected from 100 households in Ugbowo Benin-city, Edo State. Various statistical and econometric tool were applied to analyze the data. The results revealed that value-added tax has a negative and statistically significant impact on household purchasing decisions and consumption and saving and investment behaviour among households in Nigeria, but a positive and statistically significant impact on poverty levels and household welfare in Nigeria.
Based on the findings, the study recommended that government should consider reducing VAT rates on essential goods and services to enhance consumer purchasing power and stimulate aggregate demand and policymakers should introduce targeted tax reliefs or exemptions for savings and investment-related products to encourage household financial growth despite VAT pressures.
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