APPRAISAL OF THE EFFECTIVENESS OF VALUE ADDED TAX ADMINISTRATION IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1  Background Of The Study

For a country to exist in harmony, the government of such country must live up to its public economic and social obligation by providing economic and social amenities reduced or subsidized commercial rate. To do so, this will normally involve huge expenditure and therefore, will also require revenue source. Additionally, government at various levels will need to settle operational costs to be able to oer the aforementioned social amenities; one of the various sources of fund available to any government for revenue is Taxation. This could either be in form of direct or indirect tax or both.Ojo (1998) described taxation as “the concept and the science of imposing tax on the citizen”. Summer field (1986) described Revenue as referring to a monetary quality earning to a monetary quality during a given time period regardless of the amount collected. One of the forms of indirect tax is Value Added Tax (VAT) hereafter referred to VAT. The introduction of VAT in Nigeria virtue of Decree No 102 of 1993 which took effect from 1 st January 1994 mark the phasing out of the Sales Tax which has been in force since 1986 by virtue of the ales Decree No 7 of 1986. VAT was adopted in Nigeria because the federal as well as the state government need additional resources for development. This revenue can only come from increase in taxation and productive effort. The need of the government for more revenue cannot e over-emphasized particularly as revenue from crude oil which is the most important source of oil in the international market continues to influence, making it necessary for government to explore pother source of review. Similarly, revenue available from oil and present non-oil sources mainly conventional and traditional taxes were not sufficient to meet public needs, as expenditure continue to rise in an era of increased socio and economic problems, particularly the pressure from population.

1.2 OBJECTIVES OF STUDY

The purpose of embarking on these research works are:1. To collect addition on the subject and develop a mechanism for improving on existing level of knowledge and 2. To identify strategies for administrative implementation of the variables amongst others. a. Identify and appraise administration of VAT in Nigeria, highlight the loopholes and suggest solution. b. Highlight the effect of VAT on revenue generation of the country. c. To consolidate and modernize the tax system n order to provide a basis for strong revenue growth and flexible fiscal managements. To provide incentives for export production.