Abstract: This study is aimed at empirically examines the influence of VAT on price stability in Nigeria using partial equilibrium analysis. We introduced the VAT variable in the framework of a combination of structural, monetary and fiscal approaches to inflation modelling. The analysis was carried out by the application of multiple regression analysis in static form to data for the period of 1994-2016. The results however show that VAT has a strong upward effect on price levels, most likely due to the burden of VAT on intermediate outputs. The study rules out the option of VAT exemptions for intermediate outputs as a solution, due to the difficulty in distinguishing between intermediate and final outputs. Hence it can be concluded that tax should be regressive and not progressives, or better still it should be proportional.
Title: THE PARTIAL EQUILIBRIUM ANALYSIS OF VALUE ADDED TAX AND PRICE STABILITY IN NIGERIA
Author: Professor P.O Idisi, Dr. (Mrs.) I. J Ogwu, Olusola, B. S
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
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