APPROPRIATE RATIONALIZATION OF VALUE-ADDED TAX AND HUMAN DEVELOPMENT INDEX

OGONDA, Gift Orokwele
Department of Accountancy
Faculty of Management Sciences
Rivers State University Port Harcourt
gift.ogonda@ust.edu.ng
WIKPE, Chigozi Johnson
Department of Accountancy
Faculty of Management Sciences
Ignatius Ajuru University of Education Rumuolumeni, Port Harcourt
cwikpejohnson@yahoo.com
ZUKBEE, John, Danebari
Department of Accountancy
Faculty of Management Sciences
Rivers State University Port Harcourt
john.zukbee@ust.edu.ng
ABSTRACT
This study examined the effect of value added tax (VAT) on human development index (HDI) in Rivers
State. The study adopted a positivist philosophy and an ex-post facto research design. The population
of the study comprised the entire Rivers State economy from which data was gathered. Multiple
regression was used to test the postulated null hypothesis with the aid of STATA 12. We found that VAT
is quite important, and that it account for 91.2% of fluctuations of expenditure pattern of States in
Rivers State. The effect of VAT on HDI is attested to, by the information acquired from secondary data.
The governance of Rivers State and other developing countries and states should make sure that revenue
allocations, particularly VAT, not only impact but is also seen positively by citizens to have an impact
on human developments. All discernible administrative obstacles should be removed, and VAT should
be maintained and distributed among states according to level of VAT generation.
Keywords: Ability-to-pay theory, economic development, human development index, value-added tax