COMPARATIVE ANALYSIS OF VALUE ADDED TAX REVENUE AMONG DIFFERENT SECTOR IN NIGERIA.

CHAPTER 1

1.1  BACKGROUND OF THE STUDY

According to Oseregho and Associates as quoted by Aderdi, SannidAdesina(2011),VAT is a consumption tax levied at each stage of the consumption chain and borne by the final consumer of the product or service. Each person is required to change and collect VAT at a flat rate of 5% on all invoiced amounts on all goods and services not exempted from paying VAT, under the value added Tax Act 1993 as amended. Where the VAT collected on behalf of the government (output VAT) in a particular month is more than the VAT paid to other persons (input VAT) in the same month, the difference is required to be remitted to government on a monthly basis by the taxable person. Where the reverse is the case, the tax payer is entitled to a refined of the excess VAT, i.e., no VAT is payable on exports. Also VAT is payable in the currency of the transaction under individual goods or services are exchanged. The precedence for the introduction of VAT in Nigeria was based on the fact that taxation as an instrument of fiscal policy is vital in generating revenue to finance the activities of the government, redistribute income, stabilize the economy as well as stimulate growth and development. The research intends to investigate the performance of different sectors in the Nigerian economy in contributing to VAT revenue using Lagos state Federal Inland Revenue as a case study.

1.2  STATEMENT OF THE PROBLEM VAT

was introduced to contribute to the economic growth of the nation by providing revenue to government to accelerate developments. However this goal is still far from being achieved sector contributions to VAT revenue is pivotal to providing the needed revenue to government to impact on economic growth. Hence the problem confronting this research is to provide a comparative analysis of VALUE Added TAX REVENUE among different sectors in Nigeria with a case study of Federal Inland Revenue Service of Lagos state.