– Value-added Tax as a Medium of Generating Funds –
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INTRODUCTION
Some years back, the agricultural sector was playing an important role in the Nigerian economy both in generating revenue and in the physical impact. This was before oil started its own impact on the economy.
The impact created by the oil sector began to be more relevant within a short period of time. Other sectors of the economy became secondary in terms of their relevance. The sectors were neglected in favor of oil.
Oil thus became the leading factor and the leading product in term of revenue generation and foreign exchange contribution.
The condition of the economy became vulnerable to the condition of the world oil market from 1970 till date. The fluctuation of oil price in the world market has adverse effect on the Nigeria economy.
This is by diversifying the revenue generated based on the higher economy. The financial requirements of the government have been increasing over the years in facilitating the accomplishment of government functions.
Worthy of mention in this connection is the effective way of revenue generation and collection by the government.
The idea of introducing value-added tax (VAT) was therefore considered and the Federal government finally approved its introduction. Value-added tax is therefore expected to increase and be effective, contribute towards enhancing the revenue generation base of the government.
The system is expected to minimize or eliminate the corrupt practices associated with revenue assessment and collection. The importance of revenue in any country and of course, Nigeria cannot be overemphasized.
Revenue has been the bedrock of government performance. The history of revenue in Nigeria dated to the pre-colonial era when tax and levies were paid to the fathers or lords as the case may be, to Oba’s, Kings, Emirs.
The tax or levies were being paid in cash or in-kind during the pre-colonial era. It was used to support the sustenance of the colonial administration. It has even been used to mobilize farmers into cash crop production mainly for the colonial export through the use of the cash taxes. Even after independence, tax has played an important role in generating revenue for the government.
It is used for the running of the affairs of the post-independence government in Nigeria. Furthermore, it has also been used to achieve other policies such as the protection of the infant industries, income re-distribution, checking and controlling the consumption of some certain goods. Etc. it is therefore very much likely that it will continue to play a very important role in Nigeria economy.
STATEMENT OF PROBLEM
This research is carried out to find out the position of value-added tax on the overall Nigeria on taxation system.
It is to find out the impact or role both in terms of generating revenue for the government and controlling irregularities widely believed to be associated with the said tax.
It is also set to find out beyond Technical level practical problems associated with it and to make a recommendation at the end of the study.
REFERENCES
Amadi A. (1994) easy guide to VAT. Geawan publishers.
J.K Nainyeju, M.Sc, ACA, FCT; Value Added Tax. The fact of a positive tax system in Nigeria Kupag public affairs
Maclure, C.E Jr (1989) income distribution and tax incident under VAT in gills. M: shape C.S
Ndagi, J.O. (1984) essential for research methodology for the Nigerian education. University press limited, Kaduna Nigeria
Odionyeni (1994) personal income tax in Nigeria E.M.I. press, Turku Turru Zaria, Nigeria
Ogundere E.A. (1996): Value added tax. Theory and practice, university of Lagos Press Logos, Nigeria
Osaze R. E. (1985) guideline for conducting research and writing project Thesis and declaration for Nigerians student university of Benin press, Benin City Nigeria
Osyala E.C. (1985) introduction to research methodology African Feb, publisher limited, Nigeria
Zukogi M (2007), Tax in Nigeria Vol 1 2nd Edition. Pumarks publications Agege Lagos. 4—6 Central Bank of Nigeria (2004)’Annual report’ Federal Inland Revenue Service (2004)” Annual reports and Accounts”