ABSTRACT

The introduction of the Value Added Tax in Nigeria in 1993 seemed to be the

"jocker", the government needed to checkmate the continuous dwindling fortunes

of its non-oil generated revenue. And since introduction, VAT appears to have

made remarkable success in this area; and thus, establishing itself as a veritable

instrument for economic recovery and stability. It is however felt by many that VAT

ought to have achieved much more success than it did except for the numerous

problems/difficulties that have consistently limited its operational efficiency in

Nigeria. These problems range from inadequate/poor policy framework and

implementation to various administrative bottlenecks. This project will investigate

the fundamental nature of these problems, determine the extent to which VAT has

been as an instrument of economic stability and development in Nigeria. In

carrying out this investigation, three hypothesis have been formulated based on

perceived relationship between variables in the identified problems areas. The

researcher also selected data from both primary and secondary sources using

personal interview, questionnaire surveys and physical observation ad data

collection instruments. These data were statistically analyzed, using simple

regression and correlation analysis as a test statistic. Based on the analysis and

test conducted, the following major findings were made: That there is strong

relationship between VAT and federally collectable revenue in Nigeria. There are

significant factors militating against the effective management of VAT in Nigeria.

VAT is a better revenue generator to government than sales tax. VAT is an

effective instrument of economic stability and development in Nigeria. That with a

strong check and balance in the VAT administration there will be positive growth

in the economy which will foster development in Nigeria. Base on the above

findings, the researcher wish to conclude that the introduction of VAT in Nigeria is

a worthwhile venture, and that government should positively address the identified

problems with a view to proving lasting solutions to them. The researcher

therefore makes the following specific recommendations. The Government should

endeavour to provide necessary working tools such as telephones, journals,

vehicles and comfortable office accommodations for various VAT offices. Also

installation of computers in order to facilitate the documentation, analysis and

storage of data to obtain improved tax yield to the nation and information retrieval

when needed. Qualified staff should be recruited to man prominent positions and

staff should be given the opportunity of being trained in different positions and

areas as to be able to perform the assigned duties creditably. The general public

should be educated on the importance of VAT. This will appeal to their conscience

and enhance and enhance prompt payment. In addition, private individuals who

are not assessed presently will find it as a necessary obligation to pay tax.