ANALYSIS OF THE IMPACT OF VALUE ADDED TAX (VAT) ON NIGERIA ECONOMY (A STUDY OF FEDERAL INLAND REVENUE SERVICE)

ABSTRACT

The objective of this research work is to analyze the impact of value added Tax (VAT) using Federal Inland Revenue Service as a study. The objective of this study include the following: to determine whether there is significant relationship between value added tax and the Federal generated revenue; to determine the impact of value added tax on prices of goods and services. The research methodology involves survey method of sample size of 52 and use of questionnaire with chi-square to test the hypothesis which led to the following findings; that VAT as non-oil revenue increases the government revenue on total revenue with better percentage and this reduces the dependence of government on oil revenue. Based on these findings, we recommended that the statutory provisions and amend all faces or areas of laws that could be subject to multiple interpretations. The staff should be with remunerated with up to date incentives and working benefit to avoid the act of conniving with VAT payers.

TABLE OF CONTENTS

Chapter One:

Introduction

1.1 …. Background of the Study

1.2 …. Statement of the Problem

1.3 …. Objectives of the Research Study

1.4 …. Research Questions

1.5 …. Research Hypothesis

1.6 …. Significance of the Study

1.7 Scope and limitations of the study

1.8 …. Historical Background of Federal Board Inland Revenue

1.9 …. Definition of Terms

Chapter Two:

Literature Review

2.1 Introduction

2.2 Genesis of value added Tax in Nigeria Economy

2.3 The objectives and advantages of value added Tax

2.4 types of value added Tax in Nigeria Economy

2.5 An overview taxable goods and services in Nigeria Economy

2.6 Value added Tax exemption in Nigeria Economy

2.7 Determination of values of taxable goods and services

2.8 The assessments of the value added tax (VAT) in Nigeria Economy

Chapter Three:

Research Methodology and Design

3.1 …. Introduction

3.2 …. Research Design

3.3 …. Population of the study

3.4 …. Sample and sampling method

3.5 …. Sampling Technique

3.6 …. Restatement of research questions

3.7 …. Data collection method

3.8 …. Questionnaire design

3.9 …. Method of data analysis

Chapter Four: Data Presentation and Analysis

4.1 Introduction

4.2 Data analysis and questionnaire

4.3 Test of hypothesis

Chapter Five:

Summary of Finding, Conclusion and Recommendation

5.1 Summary of Findings

5.2 Conclusion

5.3 Recommendation

Bibliography

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND TO THE STUDY

The essence of value Added Tax (VAT) In Nigeria in 1994 was to boost the revenue base of the government, re-activate the economy and as possible- reduce the poverty level by appropriately re­allocating resources from personal and private sections to promote growth and development. The adoption of this form of consumption tax was also necessitated by the decline in the oil revenue due to fluctuations in the price of oil in the international market, which makes the oil revenue insufficient to run the affairs of the government similarly the present non-oil revenue Sources mainly taxes are not enough to meet public needs, as expenditure continue to rise. Custom duties, which used to be an important source of government revenue in the 80’s have dwindled significantly.

However, custom duties provided 75 percent of Federal receipt in 1994 but decrease to 19 percent in 2003. Company income tax, which accrued to 32 percent of federally collected revenue in 1994 fell to 5 percent in Nigerians pay tax 50 increasingly. The bull: of the self-employed traders, farmers and businessmen evade taxes and would only pay flat rate levies when compelled.

More so, this gives personal income tax.