ATTENTION:
BEFORE YOU READ THE
PROJECT WORK, PLEASE READ THE INFORMATION BELOW. THANK YOU!
TO GET THE FULL
PROJECT FOR THE TOPIC BELOW PLEASE CALL:
08068231953,
08168759420
TO GET MORE PROJECT
TOPICS IN YOUR DEPARTMENT, PLEASE VISIT:
THE IMPLICATION OF
NIGERIA VALUE ADDED TAX (VAT) ON THE PAYERS
A CASE STUDY OF ENUGU
STATE
ABSTRACT
A research into the
implications of Nigerian value Added Tax [VAT] on the payers [ a case study of
Enugu State ] cannot be over –emphasized .
In pursuance of this
investigation , the research used both primary source of data collection
, like oral interview as well as secondary sources such as textbooks ,
Journals ,Magazines and professional bodies . The data collection were then
analysis using simple percentage , pie chart and the chi- square .
It will be noted
that any VAT depends on the value Added and there is no way VAT
could be attempted in isolation of this value Added. Since VAT also
depends on income and profitability of individuals and companies, the quest for
VAT should be planned and coordinated
Effect was made in this research work to investigate on the constraints
encountered in the imposition of VAT and also in the recommendation were given
the way of overcoming them .
This study is obvious if we
should realize that this work will enable us to know this contribution from VAT
has helped in the Nigerian general economy so far and know if it worth it or
not.
The project is
divided into five chapters in which the first chapter deals with the
introductory part , statement of the problem, purpose of the study ,
significance of the study, research hypotheses , scope and limitations and
definition of terms.
Chapter tow deals with review of related literature as related to VAT and
as it affects the tax payers, definition of VAT. The evolution of Value Added
Tax , why modified value added tax in Nigeria , sales tax and value added tax ,
value added tax in Nigeria and the implication of VAT don the tax payers .
Chapter three deals
with research design and methodology used , primary , secondary,
sources of data analysis , population and sampling procedures.
In
chapter four was discussed , define presentation and analysis and testing of
hypothesis
Chapter five finally
deals with findings , conclusion and recommendation.
TABLE
OF
CONTENT
CHAPTER
ONE
1.0
Introduction
1.1 statement of
problem
1.2
Purpose of study
1.3
Significance of the study
1.4
Research hypothesis
1.5
Limitation scope of the study
1.6
Definition of terms
CHAPTER TWO
2.0
REVIEW OF RELATED LITERATURE
2.1 The value added tax defined
2.2 Evolution of value added tax
2.3 Why modified value added tax
in Nigeria
2.4 Sales tax and value added tax
2.4Value added tax in Nigeria
2.6 The implication of VAT on the
taxpayers
CHAPTER THREE
3.0
RESEARCH DESIGN AND METHODOLOGY
3.1 Geographical area of the study
3.2 Target population
3.3 Sampling size and procedure
3.4 Data collection techniques
3.5 Questionnaire design
3.6 Administration of instrument and
validity
CHAPTER
FOUR
4.0 Data presentation and analysis
4.1 Data presentation
4.2 Test of hypotheses
CHAPTER
FIVE
5.0 Summary of findings, conclusion and
recommendations
5.1 Findings
5.2 conclusions
5.3 Recommendations
BIBLOGRAPHY
APPENDIX
CHAPTER ONE
INTRODUCTION
Taxes in modern economics are the
most important source of government revenue. The are compulsory levies that are
regularly imposed, and as a rule, not designated for a special purpose they are
regarded as a contribution to the general revenue pool from which most
government expenditure are financed.
Taxation occupies a principal position in the Nigerian economy as in other
countries. Value – Added –Tax was introduced in Nigeria currently to replace
the old sales tax. The old sales tax, has been in operation under the federal
government legislated decree No 7 of 1986, but it is operated on the basis of
residence
However , the newly
introduced value added tax is operated under the federal government legislated
decree No 102 of July 1993. VAT is a form of indirect tax whose burden is
shifted from the manufacturers through the distribution channels to the final
consumer who then bears the final burden
Value added tax came
into effect on 1st January 1994 the tax is a tax on consumption. VAT
is a multi stage tax which is impose on goods and services as they pass through
the various stages in the business chain. From manufacturing, importation
through wholesales to relating. The payment is borne by the final
consumer because it is included n the selling price ,it’s administration
involves a credit mechanism system whereby a taxable person who is charged tax
on the supplies to his entitled to set off that tax against the tax charged by
him is supply to other persons , this making him only accountable for the
excess of the tax on the supplies from him over the tax on the supplies to him.
The tax paid or payable by a taxable person on the importation of a business
carried on by him is known as his ‘input tax’ while the tax paid on the
supplies made by him is known as his ‘out put tax’. The VAT payable in
essence is the output tax , less input tax.
The
tax on the supply of goods or services is chargeable only where:-
n
The supply is a taxable supply and
n
The goods and services are supplied by a taxable person in the course of a
business carried on by him and is payable by the person supplying the goods and
services .
VAT
in Nigeria is computed at a flat rate of 5% of the price of the goods and services.
This is affected on behalf of the government by business and organization that
have registered for VAT purpose . VAT is operated by over ,sixty countries
including some countries on the west of Africa .
In Nigeria , two agencies
of the muted nations organization the international monetary fund [IMP] and the
world bank which are closely identified with the establishment and monitoring
of the structural Adjustment programme [SAP] had since 1987 been advising that
the Nigeria tax system need to be reformed so that the government will
be less dependant on the petroleum revenue generation .
In an attempt to
effect this reformation of tax system , the federal government set up two tax
study groups in 1991 . The federal ministry of finance and economies
development set up one study group to study and make recommendation on the
reforms needed in direct taxes in Nigeria . The federal ministry of budget and
planning set up another study group which is more relevant to our
study on indirect taxes and inaugurated on 26th April in 1991 with
the objectives of among other to :
-Shift taxation towards
consumption rather than saving .
-
Improve the administration of indirect taxes.
-
Provide incentives for export production.
-
Maintain a fairly ever tax incidence.
-
Reduce dependence on oil revenue.
The general guideline for the establishment of value added tax in Nigeria was
given by this committee . value Added tax was introduced into Nigeria economy
tax system in January 1st , 1994 ,following the elegant
provision of decree No .102 of July , 1993 but it has been in operation in
other countries before it was introduced in Nigeria .
In the Nigeria context, it is a consumption tax of five percent [5%] imposed on
every vat able goods and services of every stage of production
The buyers of goods and services in the case of value Added tax are taxed and
this is country to sales tax where the produces or sellers of goods and
services pay the tax .
The final cousumers of these vat able goods and service bear the burden of the
tax . AS a result the project topic which form the center of the study
that is the implications of VAT on the payers .
1.1
STATEMENT OF THE PROBLEM
Much as it is known that VAT will increase the revenue base of Nigeria ,
it cannot be free from some problem . In view of the compulsory nature of and
strong aversion of tax [VAT] payment effects must be constitute made to
make any tax system as attractive and as conveniently as possible .
This can be achieved by
regularly evaluating the tax system with a known set of criteria
modified to suit the pervading circumstance of time .
The
Question which this reseach work aims at answering could be summarized
into the following problem statement :
1Corporate performance could be
improved upon under the value added tax. How realistic is this assumption
?
2
Given the percent economic situation and industry condition , how are
individual / companies dealing on goods and services which are
subject to VAT , going to the affected by this tax system.
3
With the apparent difficulty encountered by firms in holding down costs, and
give the incentives in VAT accruing to firm operating at minimal costs, have a
company’s pricing policy most likely to be affected.
Industrialists, manufacturers , distributors
, individuals and organization have not accept VAT ,they are the opinion that
VAT is not good for a developing country like Nigeria. The problems of
enforceability has to be tackle by employing honest and truthful personnel who
will enforce the payment of VAT so levied severe penalties has to be adopted so
as to enforce payment by VAT defaulters.
1.2
PURPOSE OF THE STUDY
The purpose of the study is find out the extent to which the tax in
investigation , VAT will imply to the tax payers and final consumers. Thus the
study is designed to investigate the implication which value added tax will
have on the tax payers , that is the relationship between the tax and those
paying it in the Nigerian context of tax system.
1.3
SIGNIFICANCE OF THE STUDY
This
work is of academic significance in the sense that it will contribute to the
understanding of the Value Added Tax and it’s implication on tax payers.
The practical significance lies on the fact that the work would highlight the
extent to which tax payers could take advantage of the opportunities in the tax
system to improve their standard of living even of greater importance is the
potential of this study in throwing more light on the unintended adverse
effects of the tax on some industries
1.4
RESEARCH OF HYPOTHESIS
Hypotheses 1
Ho : VAT is tax based on
consumption of goods and services .
H1 : VAT is not tax based on
consumption of goods and services .
Hypotheses 2
Ho :there are effect on the price
of variable goods and services
H1 :there is no effect on the price of
variable goods and services
1.6 DEFINITION OF TERMS
There are
certain complex and unfamiliar technical terms which needs to be
clearly defined as regards their usage , applied to this study for easy
understanding , there are explained in a way as to make their contextual
usage clear to the reader.
i)
VAT : This is a tax of the supply of goods and services which is
eventually borne by the final consumer , both collected at each stages of
production and distribution chain.
ii)
VARIABLE GOODS\SREVICES: These are goods or services that subject to VAT. There
are list of these goods and services in the appendix
iii)
VARIABLE PERSON: These are business organization that are
registered for VAT purpose , the firms collect VAT from the customers and rant
to the Vat secretarials.
iv)
TAXABLE PERIOD : This is the period covered by any particular return. In
Nigeria the taxable period is one month , in other words the returns and
payment are normally made monthly to the local VAT office on or
before the 14th day of the month next following that in which the
supply was made.
v)
TAX INVOICE : This is the key to any credit claim on VAT. Whenever
a person supplies a variable tax invoice in support of the transaction and take
a copy for himself
vi)
OUTPUT TAX: These are taxes paid by variable persons on the supplies he
made.
vii)
INPUT TAX: These are those VAT paid by the customers and collected by the variable
persons.
viii)
ZERO RATED GOODS: These are goods that attracts a VAT rate of 0% while the
normal rate of VAT in Nigeria is 5% for all goods and services variable
ix)
CHI-SQUARE: This is the statistical techniques used in testing the hypothesis
concerning the difference between a set of observed frequencies of a sample and
a corresponding set of expected frequencies
x)
DEGREE OF FREEDOM : This is the range within which the hypothesis is to be
tested.
xi)
CONFIDENCE LEVEL : The level of limit within which we may be confident that the
population mean lies.
xii)
TAX INCIDENCE : This is the final person(s) who bear the tax burden .
xiii)
NIGERIA ECONOMY : This is the aggregate out put of Nigeria as a whole.
xiv)
TAX SYSTEM : This is the way tax is being regulated and administered
xv)
SALES TAX: This is the tax imposed on the sales of a commendation usually
collected at whole sales or retail stages.
AFFILIATE LINKS:
Comments
Post a Comment