The Effect of Value Added Tax on the Nigeria Tax System: a Case Study of Revenue Mobilization and Fiscal Allocation Commission, Abuja
CHAPTER ONE
Purpose of the study
The main objective of this study is to ascertain whether Value Added Tax has impact on tax system of nigeria. Specific objectives include:
- To ascertain the influence of Value Added Tax on tax collection.
- To ascertain the influence of Value Added Tax on tax evasion.
- To ascertain the influence of Value Added Tax on tax avoidance.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
INTRODUCTION
Country seeking to improve its revenue generation would opt for a concept enabling it to best realize its objectives with due regards to its peculiar socio-economic make-up. One of these ways is by Taxation. A tax can therefore, be defined as a means by which, a Government appropriate part of the private sector’s income. The accumulated revenue is used in meeting recurrent expenditure. Tax occupies a unique position, because it is an important part of government policies. The ability of a government to generate revenue from this sector affects services offered by such a government. A mean of improving internally generated revenue is through value added tax.
Value added tax was first introduced by France in 1954. It has been embraced by well over seventy countries all over the world. These include the entire organization for Economic Co-operation and Development of countries, Japan, Canada, the of Michigan in the USA and many African Countries.
In Nigeria, the March towards VAT system started with acceptance of the recommendation of a study group on indirect taxation in November, 1991. The decision to accept the recommendation was made public in the 1992 budget speech of the Head of . This resulted in setting up the Modified Value-Added Tax (MVAT) committee on 1st June, 1992 as recommended by the study group. The recommendation of the committee that VAT should be administered by an independent commission was rejected by the government. Tax administration was how ever given to revenue mobilization and fiscal allocation commission, abujas, which was already charged with the responsibility of administering most other taxes in Nigeria.
The introduction of VAT in Nigeria through Decree 102 of 1993 marks the phasing out for the Sales Tax Decree No. 7 of 1986. The Decree took effect from 1st December, 1993, but by administrative arrangement, invoicing for tax purpose did not commence until 1st January, 1994.
Value-Added Tax is tax on the supply of good and services which is eventually born by the final consumer but all collected at each stage of production and distribution chain. With VAT, government reasoned, it will be virtually impossible to evade tax.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
This chapter covers the description and discussion on the various techniques and procedures used in the study to collect and analyze the data as it is deemed appropriate.
RESEARCH DESIGN
According to Asika (2009), research designs are often referred to as the structuring of investigation aimed at identifying variables and their relationships to one another. In this study, questionnaire serves as useful guide to the effort of generating data for this study. The survey research design through the administration of questionnaires was used for the study.
POPULATION OF THE STUDY
The population of study consists of staff of mobilization and fiscal allocation commission, Abuja.
CHAPTER FOUR
DATA PRESENTATION, ANALYSIS AND INTERPRETATION
This chapter is devoted to the presentation, analysis and interpretation of the data gathered in the course of this study. The data are based on the number of copies of the questionnaire completed and returned by the respondents. The data are presented in tables and the analysis is done using the chi-square test.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
Summary of findings
From the thorough research undergone for the research study, the following conclusion were made on the findings:
CONCLUSION
The introduction of the Value Added Tax to replace the former sales tax, which was adjusted to be narrow in coverage had only nine items in its list inspite of its good intentions and challenging prospects. The new tax system has been advocated on eliar to manufacturers, which is capable of enhancing productivity this reactivating our depressed economy. A year after its commencement, the program appears not to be the monster that many Nigerians though it was. It is hoped that it may turn out to be another gold mine for the government.
Although, the impact of VAT on government revenue is significant currently, attempt can be made to increase revenue from this source, if the under mentioned recommendation can be given adequate considerations, we except government to incorporate all these into its planned reviewed to VAT, so that the burden, which its execution is causing manufacturers and final consumers, can be appropriately ameliorated.
RECOMMENDATIONS
After a close study and review of literature on the subject, the following recommendations are hereby prescribed:
REFERENCES
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