Effect of Value Added Tax on the economic development of Nigeria

ABSTRACT

The purpose of this study is to investigate the effect of Value Added Tax on the Nigerian economy as it relates to how it can improve government revenue and throws more light in its contribution to the economic growth and development of Nigeria. A review of literature relating to the impact, administration and collection of VAT in Nigeria was elucidated and questionnaires and oral interview were distributed.  A Simple percentage table presentation and chi-square were used to analyze and interpret on which random sampling techniques was adopted. The finding shows that:

VAT has economic impact on consumption patterns of Nigeria; 

VAT has positive impact in Nigeria economy; 

Payment of VAT has improved the prospects of business, organization and industries in Nigeria. 

 A conclusion was drawn after the findings and the study strongly recommends that:

There should be functional offices in every council area to coordinate a vigorous campaign to educate people and seek their cooperation.

The above will no doubt erode the negative attitude that some of the tax payers have developed towards VAT.

Government should make adequate provisions, for retrieving the VAT proceeds from companies and other collection agents. 

Key words: Value Added Tax (VAT)

TABLE OF CONTENTS

Title page ----------------------------------------------------i

Dedication ---------------------------------------------------ii

Certification ------------------------------------------------iii

Acknowledgement ----------------------------------------iv

Abstract -----------------------------------------------------v

List of tables -----------------------------------------------vi

List of appendix -------------------------------------------vi

CHAPTER ONE: INTRODUCTION

Background of the study ---------------------------------1

Statement of the problem -------------------------------2

Objective of the study ----------------------------------- 2

Research questions  ---------------------------------------3

Research hypothesis  -------------------------------------4

Scope of the study ----------------------------------------4

Significance of the study --------------------------------4

Limitations of the study ---------------------------------5

Definitions of terms ---------------------------------------6

CHAPTER TWO: REVIEW OF LITERATURE

2.1     Value Added tax in Nigeria ---------------------8

2.2     Conceptual analysis of Value Added Tax ----9

2.3     Nature and Administrative structure of Value Added Tax --------------10

2.4     Impact of Value Added Tax in Nigeria -----11

2.5     Functions of Federal Inland Revenue Service-----------------------------14

2.6    Aims of Value Added Tax in Nigeria --------15

2.7   Features of a good Value Added Tax system --------------------------------15

2.8     Advantages and Disadvantages of VAT----16

2.9     Registration of VAT in Nigeria --------------17

2.10   Remittance of VAT, Rate and Types of VAT --------------------------------18

2.11   Accounting for VAT ---------------------------20

2.12  Exempted and Zero rated items---------------22

2.13   Taxable goods and services covered by VAT -------------------------------22

2.14   Goods and services exempted from tax ----24

2.15   Offence and penalties under VAT------------25

CHAPTER THREE: RESEARCH METHODOLOGY

3.1     Introduction --------------------------------------27

3.2     Research design ---------------------------------27

3.3     Population ----------------------------------------27