Effect of Value Added Tax in Revenue Generation of Southwestern States in Nigeria (2011 -2016)
CHAPTER ONE
Objective of the study
The objectives of the study are;
- To ascertain the relationship between value added tax and revenue generation in Lagos state
- To ascertain the relationship between value added tax and revenue generation in Ogun state
- To ascertain the relationship between value added tax and revenue generation in Osun state
- To ascertain the relationship between value added tax and revenue generation in Ekiti state
- To ascertain the relationship between value added tax and revenue generation in Oyo state
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Introduction
Value added tax has become a veritable source of revenue in many developing countries in Sub-Saharan Africa; it has been introduced in several countries (Whenkroff, 2003). Its adoption in Nigeria can be traced to the report of the committee set up by the Federal government in 1991 to review the entire tax system with a view to expanding the financial base for revenue generation. This became necessary because sales tax could not guarantee wider and better tax administration, as many states were resentful of its uniform nature due differences in their political orientation. The rationale behind the adoption of VAT in Nigeria can be summarized as the need to achieve: Simplification of indirect tax system Enhancement of tax neutrally in international trade Reduction in tax evasion Expansion of tax base promotion and investment. These points are further amplified by Gendron (2005) who argues that consumption tax, such as VAT, it increasing being favoured as a tax base over income and allied items. Nairayan (2003) further supports the introduction of VAT in Nigeria s an instrument for the balance of payments engineering, by encouraging exports through zero-rating of exporting goods. The core function of taxation as a revenue generating tool in developing countries has been studied by eminent scholars. Naiyeju (1996) argued that the positive result received from any tax depends on the extent of how it is properly managed. The extent of how the tax law is interpreted and implemented as well as the publicity brought into it will determine how a particular tax is able to meet its objectives. There are numerous books, articles and publications on value added tax and revenue generation. Every scholar has a unique approach to how the concepts could be identified, evaluated and implemented but all focus on one point – attainment of effective management of tax to foster economic growth and development in a given state or country. Hence, the following segments are the review of relevant literature, theories and conceptual framework.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain effect of value added tax in revenue generation of SouthWestern states in Nigeria. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing effect of value added tax in revenue generation of SouthWestern states in Nigeria.
Summary
This study was on effect of value added tax in revenue generation of SouthWestern states in Nigeria. Five objectives were raised which included: To ascertain the relationship between value added tax and revenue generation in Lagos state, to ascertain the relationship between value added tax and revenue generation in Ogun state, to ascertain the relationship between value added tax and revenue generation in Osun state, to ascertain the relationship between value added tax and revenue generation in Ekiti state and to ascertain the relationship between value added tax and revenue generation in Oyo state. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from FIRS in South Western part of Nigeria. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
The result of the study revealed that value added tax is beneficial to the Nigeria economy. This can be understood from the behaviour of the variables in this research, which shows that value added tax is statistically significant to revenue generation in Nigeria
Recommendation
From the findings, for Nigeria to attain its economic growth and development, she must be able to generate enough revenue in order to meet up with the challenges of her expenditures in term of provision of social amenities and the running costs of the Government. The result of this study indicates that if more goods and services are taxed, the revenue base of the country will increase. We still recommend that the value added tax bases be widened to bring the informal sector into the value added tax net so as to stem possible evasion even by the so faithfully complying under the old rate.
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