Journal of Commerce and Accounting Research

A. A. Ogunmakin ¹, I. A. Adebayo ², D. O. Ojo ³

Affiliations
1 Lecturer, Ekiti State University, Ado-Ekiti, NG
2 Department of Accounting, Faculty of Management Sciences, Ekiti State University, Ado-Ekiti, NG
3 Student, Department of Accounting, Ekiti State University, Ado-Ekiti, NG

Abstract

The recent increase in the Value Added Tax (VAT) in Nigeria seems to reduce the patronage of disposable items through an increase in the general price level of goods and services. To ascertain this, this paper examined VAT and minimum wage in Nigeria: implications on government revenue and the living standard of the Nigerian workers. It was a qualitative study; hence, analysis was based on the available literature. Based on the findings, it was concluded that increase in VAT rate will undoubtedly reduce consumer patronage of disposable items of Nigerian worker and therefore will affect their purchasing power. Therefore, the intended benefits of the new minimum wage are defeated. Thus, it recommended that small businesses with a threshold of about N10m should be exempted from VAT. The government, through the appropriate agencies, should ensure a thorough supervision of how government revenues are utilized and how expenditures are controlled. This might avail the government-needed revenue to defray its expenditures. Also, the business environment should be made friendly to investors. This might engender the establishment of more companies through which tax revenue will be increased.

Keywords

Value Added Tax, Minimum Wage, Government Revenue, Standard of Living.

Full Text