CHAPTER ONE
INTRODUCTION
- BACKGROUND OF THE STUDY
Taxation is compulsory payment made by adult within a limited age to provide avenue of income for the government of a country.
As it implies, it can also be define as instrument for tools of any country to influence the level of economic activity of any country.further, taxation in other words is a liability imposed upon the tax payers who may be individuals, group or other legal entities. It is an amount paid on account of fact that the tax payers has as income of minimum amount from certain tangible property, so that he makes profit on economic activities which have been chosen for taxation.
A tax is an imposition that is generally created and regulated by law. In Nigeria such law includes the income tax management act of 1961, the capital gain tax act of 1976, the abrogated and the newly introduced VAT (value added tax) decree No 102 of ).
INTRODUCTION OF VAT
VAT (Value added tax) is a general consumption tax assessed on the value added to goods and services as they pass through the supply chain.
Today, about 135 countries utilize and implement VAT and it is either the largest or second of the largest source of tax revenue.
VAT has purpose, a committee that was set up to carryout resistibility study on its implementation in januray,1993 the federal government agreed to introduced VAT. It was intensified to fist September 1993.
Apart from the general need for money to finance the administration of tax, security and social service for the citizens, taxes are impose for restraining or certainly consumption n and the transferring rescues from consumption to invest.
The revenue generated from VAT is shared among the three tiers of government, during the implementation of this 1994, the state government received 80% of the proceeds while 20% went to the federal government for covering its administration cost. In the subsequent years the distribution formula continues to change until now.