Value Added Tax Allocation and Human Development Among States in Nigeria
Based on the last human development index report released in 2019 which has a range of 0.377 to 0.954, Nigeria had a score of 0.534 which is low and below the minimum acceptable score of 0.55. This raises a concern for the standard of living level in Nigeria. In addition to this, there has been rancor over the allocation of Value Added Tax among states in Nigeria. Hence, this study is aimed at examining the current effect of Value Added Tax among states in Nigeria. This study is hinged on the endogenous growth theory. The Ex-post facto research design was used with secondary data collected in respect to all the 36 states in Nigeria which was gathered and used to carry out this study. The results of this study reveal that VAT allocation and internal source of finance have very low positive effect on the level of literacy of Nigerians. The result further shows that VAT allocation has a very low positive effect on the quality of life in Nigeria. The conclusion points out that VAT allocation have no significant effect on human development among states in Nigeria. Hence, it is recommended that state government focus on developing economic policies that promotes the literacy level and the quality of life of their citizens. Keywords: Fiscal federalism, human development, life quality, literacy, value added tax allocation, JEL Classification: H21, H8