ABSTRACT

This research is on the evaluation of the effect of Value Added Tax on Federal Government Revenue. Therefore this researched is aimed at evaluating VAT as a source of government revenue, identifying the Effect of VAT on Federal Government. The introduction of Value Added Tax in Nigeria in 1993 seemed to be the 'jockey'. The government needed to checkmate the continues dwindling fortunes of its non-oil generated revenue. And VAT since its introduction, appears to have made remarkable success except for the numerous challenges that have consistently limited its operational efficiency in Nigeria. These problems range from inadequate poor policy frame work and implementation to various administrative bottleneck. In carrying out this research, related literature, journals, magazines, reports e.t.c were reviewed for the secondary data. The data collected were analyzed using tables. Sample Pearson correlation coefficient and simple regression analysis were used for the test of Hypotheses. Based on the analyses and test conducted, these are the major findings: That there is a significant effect of VAT on federal government. That there is a significant relationship between VAT and economic growth in Nigeria. Based on the literature reviewed, the following information was obtained: That VAT is a better revenue generator to government than sales tax. That VAT is an effective instrument of economic stability and development. That the burden of VAT is borne by the final consumer. That vat can generate inflation. That VAT has factors militating against its administration in Nigeria. That with a strong check and balance in the VAT administration in Nigeria, the revenue from VAT will be boosted and there will be economic growth and development in Nigeria. Based on the above findings, the researcher wish to conclude that the introduction of VAT in Nigeria is a worth-while venture and that government should provide lasting solutions to them. That government should institute efficient administration mechanism. Finally, the revenue generated from VAT should equitably be distributed among all the levels of government.