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1
A Parametric Debate of Value Added Tax, Economic Growth and
Poverty Reduction in Nigeria

&gboi( *+arles
Department of Economics( ,ccounting and -inance
.ells /niversit0 of 1ec+nolog0( ".2.. 11% &ta( Nigeria
Email3 ogboii40a+oo.com

&gbu5i( Isaac
Department of -inance( /niversit0 of 6agos( ,7o7a( ".&..&8 29:( ;aba( 6agos( Nigeria

Abtract
Nigerian ta< aut+orities +ave continued to collect +uge sums of funds in form of revenue from 'alue ,dded 1a<
!',1# and plans +ave been concluded to e<tend t+is source of revenue to financial services sector.
2eanw+ile( empirical stud0 t+at investigates t+e relations+ip t+at e<ists among ',1( Economic =rowt+ and
"overt0 is rat+er scarce. 1+is paper e<amines w+et+er ',1 revenue could be used to maintain social co+esion
needed for sustainable long- run growt+ in Nigeria. 1wo &rdinar0 6east S>uares &6S# regressions( are
conducted using time series data from 1::)-212.
1+e stud0 +owever found t+at ',1 revenue +as positive and significant ! p?.%# impact on economic growt+
and t+at economic growt+ +as negative but insignificant !" ? .%# impact on povert0 reduction.
!eyword3 'alue ,dded 1a<( Economic =rowt+( "overt0( =overnment @evenue

"#$ %NTR&D'(T%&N
"overt0 reduction remains one of t+e main goals of developmental effort as evidenced b0 t+e adoption of
2illennium Development =oals !2D=# b0 most countries. 1+ere +as been ongoing debate about t+e elements
t+at s+ould be at t+e centre of an0 povert0 reducing strateg0 as no consensus is arrived 0et on t+e best strateg0 to
adopt. *onse>uentl0( =overnment of bot+ developed and developing countries +ave tried to adopt government
e<penditure and revenue approac+ as povert0 reduction strateg0 but due to +ig+ e<penditure( most of t+e
developing countries are facing problem of fiscal deficit. -iscal deficit leads to inflation in t+e econom0. In
man0 developing countries( +ig+ fiscal deficit crowd- out private investment t+at reduces emplo0ment and
output and t+is can aggravate povert0.
In an attempt to overcome t+ese c+allenges( Nigerian government +ave concluded plans to increase ',1
revenue in order to provide a wide range of services t+at reduce povert0 level. 1+e -ederal Inland @evenue
Service !-I@S# disclosed on 1uesda0 A
rd
( 21) t+at it +as begun plans to improve its revenue collection from
',1 especiall0 wit+ financial services sector.
Despite t+e global financial and economic *risis t+at impeded revenue generation( ',1 revenue in Nigeria +as
remained resilient( .etween 27 and 212( ',1 revenue increased b0 NA$.bn !NA1.7bn( N)).%( N)9$.)(
N%92.: N9):.%bn and N9$1.7bn# respectivel0. It is an undisputable fact t+at ',1 revenue as a ratio of =D" +as
been increasing in Nigeria( it was +ig+est in 21( wit+ a ratio of 1.:2 percent. Bowever( t+e =D" per capital
was 1$.$7 per cent( total revenue as ratio of =D" recorded 2% per cent and capital e<penditure as ratio of =D"
stood at 2.9 percent. Despite t+ese revealing features( povert0 rate stood at %.2 percent( t+is seems to lend
credence to t+e pessimistic view t+at ',1 ma0 widen ine>ualit0 gap t+at could promote povert0. It t+erefore
becomes imperative t+at empirical anal0sis on t+e relations+ip among ',1( =D" and povert0 rate be conducted.
In t+e conte<t of 2illennium Development =oals !2D=#( t+e areas of need are povert0 reduction( education(
+ealt+ care and access to finance( provision of t+ese services cannot solel0 rel0 on oil e<port. 1+erefore( ta<
revenues are re>uired( but because muc+ of t+e ta<ation is based on +ouse+old consumption( part of t+e burden
on increased ta<es falls on t+e consumption of poor people.
1a< as a source of government revenue can be used to render traditional functions of providing public goods(
maintaining law and order( defend nations territorial integrit0( regulate trade and business to ensure social and
economic stabilit0 ,Cubui7e !2:#. ',1 as a source of government revenue can correct income ine>ualit0 and
t+is is still being debated in t+e academia and polic0 circles.
Interestingl0( some sc+olars li7e ,5a7ai0e !1:::#( @uebling !2#( =aret+ !2# amongst ot+er argued t+at
',1 could be a bad instrument for povert0 reduction. 1+e0 concluded t+at since ',1 burden falls more +eavil0
on t+e poor +ouse+old t+an t+e ric+( it mig+t increase povert0 rate. In contrast( some researc+ers li7e ,7inlabi
!211#( 2ecmood and Sadi> !21#( &naolapo( ,woremi and ,5ala !21A# argued t+at ',1 revenue is
beneficial to an econom0. 1+e0 argued t+at if more goods are ta<ed( t+e revenue of t+e countr0 will
increase .Bowever( studies t+at investigate t+e lin7age between government revenue and or e<penditure on
povert0 reduction is scant0. Even t+oug+ few studies on t+e government finance and povert0 ne<us suc+ as
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,7inlabi( Jegede and De+inde !211#( conclude t+at public e<penditure could promote growt+ and +ence decline
in povert0( t+e0 failed to capture povert0 in t+eir stud0.
1+is stud0 is motivated b0 t+e desire to provide a first attempt in e<ploring w+et+er ',1 revenue led-growt+
could reduce povert0 in Nigeria. 1+e findings will contribute to t+e relativel0 under e<plored researc+ area of
',1 - povert0 reduction ne<us and provide insig+t into +ow public finances can be optimall0 utiliCed to
ma<imiCe t+e welfare of t+e citiCenr0. 1+e rest of t+e paper is organiCed as follows3
Section 2 summariCes previous studies( section Adiscusses t+e data( model formulation and met+odolog0
adopted to ac+ieve t+e paperEs ob5ective( Section ) presents t+e result and t+en discusses t+e findings( and finall0(
section % concludes.

)#$ *%TERAT'RE REV%E+
1+ere are diverse sc+olarl0 opinions to t+e impact of 'alue ,dded 1a< !',1# on economic growt+ and povert0
reduction. ,5a7ai0e !1:::# introduced t+e conceptual framewor7 to anal0Ce t+e macroeconomic effects of value
,dded 1a< in Nigeria( using a computable general e>uilibrium anal0sis. @ecentl0( Step+en !21A#F ,dereti(
,desina and Sanni !211#( and /meora !21A# amongst ot+ers argued t+at ',1 impact positivel0 on economic
growt+ and s+ould t+erefore reduce povert0 t+roug+ t+eir direct effect on recurrent e<penditure of government
and indirect effect t+roug+ capital e<penditure. 1+ere is lac7 of consensus among polic0 ma7ers and academia
about t+e macroeconomic impact of ',1 on economic growt+ and povert0 reduction in Nigeria. "er+aps( t+e
c+oice of variables and met+odolog0 emplo0ed in t+ese anal0ses account for t+ese mi<ed results.
,5a7ai0e !1:::# found t+at w+en ',1 is treated in a cascading manner b0 ',1 organiCations and in5ected
into t+e econom0( t+e price( consumption e<penditure( output and income effects will be most deleterious.
&naolapo( ,woremi and ,5ala !21A# argue t+at if more goods and services are ta<ed( t+e revenue base of t+e
countr0 will increase.
,dreti( ,desina and Sanni !211# descriptivel0 investigated t+e impact of ',1 on economic growt+ in Nigeria
from 1::)-2$ and found t+at ',1 +as positive and significant effect on economic growt+ in Nigeria.
2i7i !211# e<amined t+e effect of t+e ',1 rate c+ange on aggregate consumption and economic growt+. 1+e
result s+owed t+at t+e trend of aggregate consumption on real =D" c+anged( w+en ',1 was c+anged. 1+e0
found t+at ',1 revenue is positivel0 correlated wit+ gross domestic product.
Step+en !21A# e<amined t+e effect of ',1 on output growt+ in Nigeria using Error *orrection 2et+odolog0
!E*2#. Be found a positive and significant relations+ip between ',1 and output growt+ in Nigeria. 1+e result
from t+e stud0 also indicate t+at past values of ',1 could be used to predict t+e future be+avior of output
growt+ in Nigeria.
=aret+ !2# also found t+at if endogenous growt+ models are to be applied( t+en +uman capital investment. Be
concluded t+at ta< effect on growt+ will be ver0 wea7.
&verall( none of t+ese studies e<amined t+e impact ',1 led- growt+ could +ave on povert0 reduction w+ic+ is
t+e focus of t+is stud0. Bowever( t+is stud0 attempts to fill t+is gap. In addition( t+e stud0 include government
revenue and e<penditure variables for w+ic+ data were available as control variables. 1+e potential importance
of t+ese variables was recogniCed b0 ,lade5are !21A#( 2e+mood G Sadi> !21# ,7inlabi( Jegede and De+inde
!211#( Dollar !2# amongst ot+ers.
Dollar !2# used 2 stage least s>uares to e<amine w+et+er growt+ is good for t+e poor. 1+e finding of t+e
stud0 indicates t+at growt+ generall0 does benefit t+e poor as muc+ as ever0one else( so t+at t+e growt+
en+ancing policies of good rule of law( fiscal discipline and openness to international trade s+ould be at t+e
center of successful povert0 reduction strategies.
Da7wani !2# anal0Ced +ow relation between growt+ and povert0 can c+ange wit+ initial levels of economic
development and ine>ualit0. 1+e result from t+e stud0 furt+er s+owed t+at povert0 rate will be +ig+er as t+e
initial level of mean income is +ig+er.
1+e implication t+at emerges is t+at faster growt+ ma0 lead to a slower reduction or even increase in povert0
depending on +ow muc+ ine>ualit0 rises.
@oemer and =ugert0 !1::7# e<amined w+et+er economic growt+ tends to reduce povert0. 1+e result from t+eir
stud0 indicates t+at an increase in t+e rate of per capital =D" growt+ translate into a one- for- one increase in
t+e growt+ of average income of t+e poorest. 1+e0 concluded t+at countries wit+ better macro policies grow
faster( and t+is growt+ tends to alleviate povert0.
Harr !21# also found t+at t+e relations+ip between economic growt+ in t+e agric( industrial and services and
povert0 incidence for 1+ailand( Indonesia( 2ala0sia and t+e "+ilippines is positive using pooled data. 1+eir
result confirm t+at povert0 reduction was related to growt+ of agric and services but not to growt+ of industr0.
,lade5are !21A# anal0Ced t+e impact of government spending on economic growt+ in Nigeria using 'ector
Error *orrelation 2et+od !E*2# and granger causalit0 but included government e<penditure and capital
e<penditure as additional variables.
1+e0 found t+at growt+ in government recurrent e<penditure does not bring about significant growt+ in t+e
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econom0. 1+e0 also found t+at causal effect of economic growt+ on government capital spending is more
significant t+an government recurrent e<penditure.
Itriago !211# e<amined t+e efficac0 of using development ta<ation to fig+t povert0. -indings from t+e stud0
indicate t+at developing countries +ave not made t+e most of ta< policies as a tool for ac+ieving povert0
reduction.

,#$ -ET.&D &/ ANA*01%1 AND -&DE* 1PE(%/%(AT%&N
,#" Data and Data 1ource
1+e data for =ross Domestic "roductF =overnment @evenue( *apital e<penditure was sourced from *entral
.an7 of Nigeria Statistical .ulletin( 212( w+ile 'alue ,dded 1a< data was sourced from *entral .an7 of
Nigeria ,nnual @eports and ,ccounts various issues. 2eanw+ile 6abour -orce and secondar0 sc+ool enrolment
data was sourced from Horld Development indicators !212#.
,#) -ethodology
1+e met+odological framewor7 adopted in t+is paper is t+e 6og-6og specification model specified in e>uation !ii#
and !iv#
1+e series used in t+e anal0sis are annual observation e<pressed in natural logarit+ms wit+ sample period( from
1::)-212.
1+is stud0 will use two regression anal0ses to evaluate t+e relations+ip between 'alue ,dded 1a< !',1#(
economic growt+ and povert0 reduction in Nigeria.
Descriptive statistics in t+e form of mean( median( S7ewness( Durtosis etc will also be adopted. &rdinar0 6east
S>uares !&6S# is emplo0ed because of its .est 6inear /nbiased Estimate !.6/E# properties
*orrelation anal0sis will also be used to e<amine t+e nature of relations+ip among variables.
,#, -odel2 13ecification
1+e initial econometric model to estimate t+e growt+ from ',1 is3
=rowt+ I f!',1( conditional set#
; I f!D( 6# I ,D
1
6
2
6
2
g !',1#F
or F f!D( 6# I ,D
1
6
2

D',1
A

1+e production function will be
In =D" I In , J
1
In !D# J
2
In !6# J
A

In !D',1#KKKKK. !1#
H+ere( In !=D"# stands for t+e c+ange in =ross Domestic "roduct( In !D#( In !6# and In !D',1#( stand for t+e
c+ange of 1otal =overnment @evenue( In !D#( c+ange in ',1 revenue( In !6# c+ange of +uman capital and In
!D',1# stands for c+ange ',1 and a c+ange in productivit0. .0 adding t+e disturbance error term to t+e
e>uation above( we +ave t+e growt+ accounting formulation. -rom t+e e>uation( it could allow us to run
regressions estimating t+e =D" growt+ elasticit0 wit+ different form of capital.
1+us( t+e growt+ e>uation used in t+is stud0 is3
6og !=D"# I J
1
log !',1# J
2
log !*ape# J
A
log !sece # J
)
log !"&'# J
%
log!rev# J
9
log !6ab-# J
e KKKKK.. !ii#
1+e second model is adopted to test t+e effect of economic growt+ on t+e reduction of povert0. ,dditionall0( t+e
ratio of ',1 to =D" is used to capture t+e direct effect of ',1 on povert0 reduction in t+e model. 1+e
functional form of t+e model is stated t+us3
"&' I f!=D"percap( ',1L=D"( *apeL=D"( @evL=D"( Sece( labf#K.!iii#
1+e econometric model of t+e e>uation
log"&' IJ
1
log=D" J
2
!',1# J
A
log !*ape# J
)
log !rev# J
%
log !sece# J
9
log !6ab-# J KKKKK..
!iv#
H+ere "&' I "overt0 incidence of people living below povert0 line in Nigeria
=D"I =ross Domestic "roduct at current basic prices as ratio population.
',1 I ',1 revenue collected as ratio of =D"
rev I =overnment gross revenue as ratio of =D"
sece I Secondar0 sc+ool enrolment
6abf I 6abour force
I *onstant term

1(

2(

A(

)(

%(

9
I parameters to be estimated
I error term
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'ol.%( No.1)( 21)

)
4#$ E-P%R%(A* RE1'*T AND D%1('11%&N
4#" Decri3tive 1tatitic
Table "
GDP Rev VAT (APE 1E(E P&V *A5/
2ean
2edian
2a<imum
2inimum
Std. Dev.
S7ewness
Durtosis
:.7A$)
%.:)
2).9:
1.A
7.)1A$
.721%
2.22))
2%.1%2
2%:7
)1.%:
11.92
$.:A)2
.9)AA
1.:)A9
1.2%%2
1.AA
1.:2
.%1
.)19)
-.7)9A
A.$2A7
%.7$)2
).9
1%.9
2.2
A.92:A
1.2A:
A.$2A7
2:.)7A9
29.9%
)).)
2A.2%
9.9A12
1.A9%
A.2
)$.9A1%
):.7
%.2
)%.:
1.:177
-.7%)%
1.92)%
%A.7A9$
%).
%).
%A.
.)%2)
-1.7%7
2.1%71
-rom table 1 above( t+e descriptive results s+ows t+e average growt+ of =ross Domestic "roduct !=D"#(
=overnment @evenue !@E'#( 'alue ,dded 1a< !',1#( *apital E<penditure !*,"E#( Secondar0 Sc+ool
Enrolment !SE*E#( "overt0 @ate !"&'# and 6abour -orce !6,.-# at :.7A$)( 2%.1%2( 1.2%%2. %.7$)2. 2:.)7A9(
)$.9A1%( and %A.7A9$ respectivel0. ,lso t+e ma<imum values are =D" !2).9:( @E' !)1.%:# and 6,.-
!%).# wit+ t+e minimum values of 1.A !=D"#( 11.92 !@E'#. .%1 !',1#( 2.2 !*,"E#( SE*E
!2A.2%# )%.: !"&'# and %A. !6,.-#
1+us( it could be observed t+at t+ere is no wide variance of t+e individual values from t+e mean values. 1+e
result of t+e S7ewness and 7urtosis of t+e values suggest a positivel0 s7ewed distribution for =D". @E' *,"E
and SE*E w+ile ',1( "&' and 6,.- indicates negativel0 s7ewed distribution.
4#) (orrelation Analyi
TA5*E )
GDP Rev VAT (APE 1E(E P&V *A5/

=D"
@E'
',1
*,"E
SE*E
"&'
6ab-
1.
.A%$$
.$):
-.9%%1
.:977
.17$
.%9%$

1.
.)A2
-.%27
.AA%
-.A92
.7$A


1.
-.9A
.72)2
-.%21
.7%99










1.
-.9)%:
.A9:7
-.)7:7




1.
.9$92
)$$





1.
-.A)2






1.
S&/@*E3 ,ut+ors compilation 21)
-rom table two above( t+ere is a wea7 positive correlation between =overnment revenue and =ross Domestic
product. , strong positive correlation is observed between ',1 revenue( secondar0 sc+ool enrolment( gross
domestic product and 6abour -orce. H+ile( a strong negative correlation is found between capital e<penditure
and economic growt+ in Nigeria.
4#, RE1'*T &/ GR&+T. E6'AT%&N
Table ,2 De3endent variable2 Economic growth

Ex3lanatory Variable (oefficient 3robability value
6og @ev
6og ',1
6og *,"E
6og SE*E
6og "&'
6og 6,.-
A7.2%%$
.%2A
9.9:%MMM
-.2A7
.7$%)MMM
.2:$:M
-1.A:17
!.97$9#
!.A799#
!.9#
!.$)9%#
!.#
!.$:1#
!.)%2#
S&/@*E3 ,/1B&@S *&2"I6,1I&N 21)
Diagnotic Tet
@-s>uared .:$:
,d5usted @-s>uared .:$)
--statistics !"rob# 1:A.A7 !.#
Durbin N Hatson Stat. 2.1)
N&1E3 M M M( M M( M denotes significance at 1O( %O( and 1O respectivel0
"robabilit0 values are in parent+esis.
1able A s+ows t+e regression results of e>uation 2 w+ic+ are tested wit+ t+e e<planator0 variables. 1+e variables
are in logarit+m form to test t+e elasticit0 of t+e e<planator0 variables to t+e dependent variable. 1+e combined
impact of gross domestic product per capita and t+e ',1 revenue( w+ic+ is in ratio form to =D"( are estimated
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%
as s+own in table A.
1+e result s+owed t+at :$.:O of t+e regressand are e<plained b0 t+e combined effect of t+e e<planator0
variables. 1+is implies t+at t+at t+e model +as a good fit( t+e results can be discussed as follows3
1+e partial regression coefficient of ',1 revenue in Nigeria is positive and statisticall0 significant at 1O level(
it means t+at +olding ot+er variables constant( a one percentage increase in ',1 revenue in Nigeria increases
=D" b0 9.9 percent. 1+is result is consistent wit+ previous findings b0 ,dereti( ,desina and Sanni !211#(
.a7are !21A#( /meora !21A# and &naolapo( ,woremi and ,5ala !21A# t+at ',1 revenue +ave a statisticall0
significant effect on output growt+ in Nigeria.
1+e partial regression coefficient of total government revenue is positive but insignificant at level. Bolding ot+er
variables constant( a one percentage increase in government revenue increase =D" b0 .% percent
1+e partial regression coefficient of capital e<penditure is negative but insignificant. Bolding ot+er variables
constant( a one percentage increase in government capital e<penditure retards growt+ b0 .2 percent. 1+is
finding is inconsistent wit+ t+e findings of ,lade5are !21A# t+at finds a significant positive relations+ip between
government capital spending wit+ economic growt+.
1+e partial regression coefficient of povert0 is positive and statisticall0 significant at 1O. 1+is is surprising( as
t+eor0 e<pects an inverse relations+ip between povert0 and economic growt+. 1+is finding seems to lend
credence to t+e finding of Itriago !211# t+at government in developing countries +ave not made t+e most use of
ta< policies as a tool for ac+ieving povert0 reductions.
1+e partial coefficient of labour force +as an inverse relations+ip but insignificant relations+ip wit+ economic
growt+ in Nigeria. 1+is implies t+at labour +as not been full0 utiliCed in Nigeria.
1+e --statistics of 1:A and probabilit0 value of . s+ows t+at t+e model is statisticall0 significant. Durbin
Hatson statistics of 2.1) denotes absence of serial auto correlation.
4#4 Reult of 3overty e7uation
Table 4 De3endent variable2 Poverty rate
Ex3lanatory variable (oefficient Probability Value
* 1%1(11)7 !.2:9#
6og =D" .$A2$ !.A$1#
6og *,"E .A197 !.27%)#
6og SE*E -.%9%9 -.%9%9
6og *,"- -1)1:1 !.17:)#
6og ',1 -A.2)) !.27%)#
S&/@*E3 ,/1B&@S *&2"I6,1I&N 21)
Diagnotic Tet
@-s>uared .9:
,d5usted @-s>uared .)%$7
--statistic ).%12
Deburine Haston Stat. 1.A2%
1+e result of t+e povert0 e>uation in table )( s+ows t+at 9.: per cent of t+e dependent variable are e<plained b0
t+e e<planator0 variables.
1+e partial coefficient of gross domestic product is positive and statisticall0 significant wit+ povert0 rate at %O
level.Bolding ot+er variables constant( a one percentage increase in t+e =D" in Nigeria increase povert0 bu0
.$A percent. Its positive sign s+ows t+at ',1 N 6ed growt+ +as not contributed to povert0 reduction in Nigeria.
1+is result is inconsistent wit+ t+e findings of Dollar !2#( Da7wani !2# and @oemer and =ugert0 !1::7#
t+at finds growt+ to be povert0 reducing. Bowever( t+e0 concluded t+at countries wit+ better macro policies
grow faster( and t+is growt+ tends to alleviate povert0.
1+e coefficient of ',1 is found to +ave an inverse but insignificant relations+ip wit+ =D"( Bolding ot+er
variables constant( a one percentage increase in ',1 reduces povert0 b0 A.2) per cent.
1+e partial coefficient of capital e<penditure is also positive and statisticall0 significant at %O level. Bolding
ot+er variables( a one percentage increase in capital e<penditure increases povert0 b0 .A1 per cent. 1+e
implication t+at emerges from t+is result suggest t+at most capital pro5ects e<ecuted in Nigeria are not pro-poor.
1+e variable for +uman capital development !Secondar0 sc+ool enrolment# +as an inverse relations+ip wit+ =D"
and statisticall0 significant at 1O level. Bolding ot+er variables constant( a one percentage increase in
secondar0 sc+ool enrolment reduces povert0 b0 .%9 per cent. Similarl0( t+e partial coefficient of 6abour -orce
is negativel0 and statisticall0 insignificant. Bolding ot+er variables constant( a one percentage increase in labour
force reduces povert0 b0 1.A: percent. 1+is is consistent wit+ t+e literature review( w+ic+ indicates t+at +uman
capital development +as t+e potential to alleviate povert0.

8#$ (&N(*'1%&N1 AND P&*%(0 %-P*%(AT%&N1
1+e stud0 provides empirical evidence of 'alue ,dded 1a< in bot+ direct and indirect wa0s on t+e reduction of
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9
povert0 in Nigeria from t+e period 1::)-212.
&rdinar0 6east S>uares !&6S# in t+e form of 2 two stage least s>uares regressions are represented in t+e growt+
model and povert0 model in t+is stud0( and t+e findings of t+e regressions are discussed. 1+e ma5or findings
from t+e stud0 are3
i. 1+e ',1 revenue collected in Nigeria are found to +ave a significant and positive effect on t+e
economic growt+ of Nigeria.
ii. 1+e economic growt+ in Nigeria is found to +ave a positive and significant impact on t+e reduction of
povert0.
iii. 1+e ',1 revenue +ave an inverse but insignificant impact on t+e povert0 reduction in Nigeria. 1+e
evidence provided in t+is stud0 is consistent wit+ t+e assumption of direct and indirect effect of ',1 on
povert0 reduction.
1+e above findings +ig+lig+t t+e importance of ',1 revenue on t+e reduction of povert0 level in Nigeria. .ased
on t+e findings( t+e Nigerian government s+ould e<pand and encourage more ',1 revenue but it s+ould be
mentioned t+at( for ',1 revenue to ma7e meaningful impact( goods consumed b0 t+e ric+ s+ould be ta<ed more
and t+ose consumed b0 t+e poor s+ould be reduced in order to reduce income ine>ualit0. ,dditionall0(
government is encouraged to spend more on capital e<penditure t+at will +ave direct impact on t+e poor.
E<penditure on +uman capital development s+ould be given priorit0.

RE/EREN(E1
,lade5are( S.,. !21A#. P=overnment Spending and Economic =rowt+3 Evidence from NigeriaQ( &nline
at 3+ttp3LLmpra.ub.uni.muenc+em deL)A:19 2"@, paper No. )A:19
,ruwa( S.,.S !212#. P"ublic -inances and Economic =rowt+ in Nigeria3 "ublic and 2unicipal -inance. 'ol. 1
Issue 2( 212 2:-A9.
Dollar( D. !21#. PIS =rowt+ =ood for t+e poorQ *enter for Economic and polic0 @esearc+.
=aret+( D.2 !2#. P1a<ation and Economic =rowt+Q -iscal studies 'ol. 21( No 1 "p. 1)1-19$
Itriago( D. !211#. P&wing Development 1a<ation to -ig+t povert0Q ,vailable at .www.o<fam.org. 1-$$
Da7wani( N. and Son B.B !2$#. P"overt0 E>uivalent =rowt+ @ateQ @eview of Income and Healt+ Series %)(
Number ). 9A)-9%%.
2i7i( .. !211#. P1+e Effect of t+e 'alue ,dded 1a< @ate *+ange on ,ggregate *onsumption and Economic
=rowt+3 ,vailable at www.columbia. EduLc5ebLreesrac+.
&nuba( I. !21)#. P-I@S to improve revenue from 'alue ,dded *ollectionsQ "unc+ Newspaper June A( 21)
"pA
@oemer and =ugert0 !1::7#. PDoes Economic =rowt+ @educe "overt0Q *onsulting ,ssistance on Economic
@eform II.
@uebling( *.E. !1:7A#. P, 'alue ,dded 1a< and -actors ,ffecting its Economic ImpactQ -ederal @eserve .an7
of St. 6ouis. "p. 1%-1:.
1+e *.N ,nnual @eport( !21#. PStatement b0 t+e =overnorQ www( *enban7.org. 'ol. 2. No A "p :%
1+e *entral .an7 of Nigeria !21#Q P,nnual @eport pp. :%.
Harr( ".= !21# P"overt0 @eduction and Secretroal =rowt+3 Evidence from Sout+east ,sia3 ,ustralia National
/niversit0. *anberra( ,ustralia 1-29.
Horld .an7( !212#. PHorld Development Indicators 211L212 !Has+ington#. Horld .an7 !Has+ington
Horld .an7#
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