ATTENTION:
BEFORE YOU READ THE CHAPTER ONE/ABSTRACT OF THE PROJECT TOPIC
BELOW, PLEASE READ THE INFORMATION BELOW.THANK YOU!
INFORMATION:
YOU CAN GET THE COMPLETE PROJECT OF THE TOPIC BELOW. THE FULL
PROJECT COSTS N5,000 ONLY.
THE FULL INFORMATION ON HOW TO PAY AND GET THE COMPLETE PROJECT
IS AT THE BOTTOM OF THIS PAGE. OR YOU CAN CALL: 08137701720
THE EFFECT OF
VALUE ADDED TAX ON REVENUE GENERATION OF SOUTHWESTERN STATES IN NIGERIA
2011-2016
ABSTRACT
This study
investigate the Effect of value added tax on revenue generation of southwestern
states in Nigeria during the period of 2011-2016.
The study
used survey design, questionnaire was u8sed used in the study to get a robust
result.
The findings
reveals that; There is a direct relationship between value added tax and
revenue generated in Ondo state; There is a direct relationship between value
added tax and revenue generated in Lagos state; That there is a direct
relationship between value added tax and revenue generated in Osun state; There
is an inverse relationship between value added tax and revenue generated in
Ekiti state; There is a direct relationship between value added tax and revenue
generated in Oyo state; There is a direct relationship between value added tax
and revenue generated in Ogun state.
The study
concluded that value added tax is beneficial to the states in Nigeria and hence
Nigeria economy.
The study
suggest that; The outcome of this study indicates that if more goods and
services are taxed, the revenue base of the states will increase, therefore,
government should develop a strategy to tax the citizens moderately; The tax
collection body and mechanism used by tax officials to administer taxation
collection must be free from corruption and embezzlement. If this is not done
the revenue collected many not reach the desired point.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Countries
introduced a Value Added Tax (VAT) because they are dissatisfied with their
existing tax structure. This dissatisfaction falls broadly into one, or
possibly all, of four categories: (1) the existing sales taxes are
unsatisfactory; (2) a customs union requires discriminatory border taxes to be
abolished; (3) a reduction in other taxation is sought; or (4) the evolution of
the tax system has not kept pace with the development of the economy (Tait,
1988). If VAT had a birth certificate, the place and year of birth would read
‘France’, ‘1954’ respectively. The VAT created in France in 1954 was a Value
Added type of consumption tax on goods, levied at the production stage. In 1968
however, this tax was merged with the existing turnover tax on services and a
local tax on retail sales into a single, comprehensive levy extending through
the retail stage.(Owens, 1996) The Value Added Tax (VAT) was introduced in
Nigeria in 1993 by the Federal Military Government. Since then, the Value Added
Tax Decree had been amended more than half
a dozen times, the latest being the Value Added Tax (Amendment) Act
of 2007. Some of the amendments have
introduced significant changes which are yet to be reflected in the body of
existing literature. The idea of introducing VAT was recommended by Dr
Sylvester Ugoh, who led a Study Group on Indirect Taxation in November 1991.
The decision to accept the recommendation was made public in the 1992 budget
speech. (okpe, 2001) In addition, according to Obianwuna (2005), the Federal
Government set up two study groups in 1991, one was set up by the Federal
Ministry of Finance and Economic Development to study and give recommendation
on the reform needed in direct taxes in Nigeria. The Federal Ministry of Budget
and Planning set up the other group on indirect taxation. As the group
recommended the introduction of VAT in Nigeria, this made the Federal
Government to set up a committee who will carry out a feasibility study on its
implication in Nigeria. This committee gave the general guideline for the
establishment of VAT in Nigeria and its administration was given to the Federal
Inland Revenue Services, which was already charged with the responsibility of
administering most other taxes in Nigeria. The Sales Tax was under jurisdiction
of the States and generally poorly administered with marginal contribution in
terms of revenue. After extensive deliberation and consultation, VAT was
introduced on 24th August 1993 as a federal tax by the Value Added Tax Decree
102 in Abuja by the President and Commander-in-chief of Nigeria. The Nigerian
Federal Government enacted the VAT Amendment Act in 2007; this act empowered
the Federal Government to fix the rate of value added taxes to be imposed in
Nigeria. The rate was increased from 5% to 10%. However, discussions regarding
the possibility of a 50% reductions in the rate are on. The Value Added Taxes
are one of the major sources of financing in a number of economically
developing countries across the world; this is also similar in Nigeria as well.
1.2
Statement of the Problem
Value added
tax as a consumption tax has a wider coverage since the cause of adverse
variance can be adequately controlled under proper administration (Onaolapo,
Aworemi, & Ajala, 2013). The revenue generated from consumption taxes can
help to boost the financial base of any economy. This however involves
exploiting the potential and adopting the type of consumption tax that will
recognize the tax payers as utility minimizing individuals and safeguarding
their evading behaviour.
With the
introduction of Value added tax, there is increase in revenue base of federal
government of Nigeria, because the problem of tax avoidance and tax evasion are
reduced. (Okoli, & Afolayan, 2015). Also VAT has shifted the burden of tax
toward consumption rather than savings hence encourages investment. With the
increment in investment, this leads to increase in the level of national
income. VAT in addition to the above contributes to increase in the standard of
living of the citizens. This is because the proceeds from VAT are used to
provide public goods like roads, bridges, schools and hospitals, which will be
of equal benefit to both the rich and the poor. It has also generated
employment for many Nigerians.
Poor VAT
administration as identified by Olaoye (2009) was one of the problems
confronting VAT in Nigeria. Tax authorities perform only the technical
functions without performing the needed management functions, taken the
complexity of tax administration into consideration, there are bound to be
ineffectiveness of tax administration. Basically, the performance of only
technical functions leads to false declaration, refusal to complete tax return
forms, fraud, inflation of deductible expenses, smuggling, default, illegal
bunkering, etc. The dishonest practices by some tax officials also pose a
serious threat to the effective tax administration in Nigeria especially when
such practices are capable of having demoralizing effects on honest tax payers.
Hence, this study set out to examine the effect of value added tax o internally
generated revenue of south western states in Nigeria.
1.3 Research
Questions
1. What is
the impact of value added tax on the revenue generated in Ondo State?
2. What is
the impact of value added tax on the revenue generated in Lagos State?
3. What is
the impact of value added tax on the revenue generated in Osun State?
4. What is
the impact of value added tax on the revenue generated in Ekiti State?
5. What is
the impact of value added tax on the revenue generated in Oyo State?
6. What is
the impact of value added tax on the revenue generated in Ogun State?
1.4
Objectives of the Study
1.
Investigate the relationship between Value Added Tax and revenue generation in
Ondo State.
2. Examine
the relationship between Value Added Tax and revenue generation in Lagos State
3. Evaluate
the relationship between Value Added Tax and revenue generation in Osun State
4. Determine
the relationship between Value Added Tax and revenue generation in Ekiti State.
5. Ascertain
the relationship between Value Added Tax and revenue generation in Oyo State.
6. Find the
relationship between Value Added Tax and revenue generation in Ogun State
1.5 Research
Hypothesis
H01: Value added tax does not have significant
effect on revenue generation of Ondo State
H02: Value added tax does not have significant
effect on revenue generation of Lagos State
H0 3: Value added tax does not have
significant effect on revenue generation of Osun State
H0 4: Value added tax does not have
significant effect on revenue generation of Ekiti State
H0 5: Value added tax does not have
significant effect on revenue generation of Oyo State
H06 Value added tax does not have significant
effect on revenue generation of Ogun State
1.6 Scope of
the Study
The study
focuses on the Effect of value added tax on revenue generation of southwestern
states in Nigeria, using the timeframe of 5 years, (2011-2016). The study
hereby uses secondary data, and the data was sourced from the federal
government internal revenue website.
1.7
Significance of the Study
This
research work will be an invaluable source of literature for researchers,
student, marketing practitioners, accountants, bankers, companies, government
agencies and related field who might be interested in knowing much about the
concept of “VAT”. Its benefaction to economic development in South Western
States in Nigeria. The origin of value added tax, its application and effects
on internally generated revenue in South Western States in Nigeria were
analyzed which will be an indispensable material to the above mentioned
beneficiaries.
1.8
Definition of Terms
Tax: is a mandatory financial charge or
some other type of levy imposed upon a taxpayer (an individual or other legal
entity) by a governmental organisation in order to fund various public
expenditures. A failure to pay, or evasion of or resistance to taxation, is
punishable by law.
Value Added Tax: this is known in some
countries as a goods and services tax, it’s a type of general consumption tax
that is collected incrementally, based on the increase in value of product or
service at each stage of production or distribution.
Vatable Goods and Services: these are all
goods manufactured/assembled in or imported into Nigeria, except those
specifically exempted under the law. All items not included in this published
list are vatable at the standard rate of 5%, except in the case of exports
where the rate is 0%.
Vatable Persons: A Vatable person under the
VAT Act is “a person (other than a public authority acting in that capacity)
who independently carries out in any place, an economic activity as a producer,
wholesaler, trader, supplier of services (including mining, and other related
activities) or person exploiting tangible or intangible property for the
purpose of obtaining income by way of trade or business”. In other words, a
Vatable person is the one who trades in Vatable goods and services for a
consideration.
Taxable period: this is the period within
which vat is collected and remitted. The taxable period in Nigeria is made
before the 21st day of the following in the month of collection.
Tax Invoice: is the authority to make
claims on VAT. It is the invoice or receipt given to the purchaser of the
vatable goods and services.
Sales Tax: is a tax paid to a governing
body for the sales of certain goods and services. Usually laws allow or require
the seller to collect funds for the tax from the customer at the point of
purchase.
Tax System: a legal system for assessing
and collecting taxes.
Budget: an estimate of cost, revenue, and
resources over a specific period, reflecting a reading of future financial
condition and goals. It serves as a plan of action for achieving quantified
objectives, standard for measuring performance and device for coping with foreseeable
adverse situations.
Economy: an economy is the large set of
inter-related production and consumption activities that aid in determining how
scarce resources are allocated.
Tax Administration: a revenue service,
revenue agency or taxation authority is a government agency responsible for the
intake of government revenue, including taxes and sometimes non-tax revenue.
Revenue: is the income that a business has
from its normal business activities, usually from the sale of goods and
services to customers. Revenue is also referred to as sales or turnover. Some
companies receive revenue from interest, royalties, or other fees.
HOW TO GET THE FULL PROJECT WORK
PLEASE, print the following instructions and information if you
will like to order/buy our complete written material(s).
HOW TO RECEIVE PROJECT MATERIAL(S)
After paying the appropriate amount (#5,000) into our bank Account
below, send the following information to 08137701720
(1) Your project topic
(2) Email Address
(3) Payment Name
(4) Teller Number
We will send your material(s) after we receive bank alert
BANK ACCOUNTS
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 0046579864
Bank: GTBank.
OR
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 2023350498
Bank: UBA.
NOTE:
YOU CAN ALSO MAKE A TRANSFER PAYMENT
FOR MORE INFORMATION, CALL:
08137701720AFFILIATE LINKS:
Comments
Post a Comment