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evaluation of views of the tax payers on value added tax

evaluation of views of the tax payers on value added tax

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THE NATURE AND CONSEQUENCES OF JUVENILE DELINQUENCY IN NIGERIA: A STUDY OF ENUGU NORTH LGA, ENUGU STATE
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CHAPTER ONE

1.1     INTRODUCTION


Taxation has long been practiced in Nigeria. Initially, only men were expected to pay taxes but now all people working and anybody found in the capacity of paying tax are obliged to pay tax.

Tax is a mandatory levy on income charged for the purpose of carrying out government activities losses incurred by government in recent times through tax evasion are increasing rapidly despite the pathetic financial and economics state of the country. There are daily reports on newspapers and magazines that the government losses billions of naira yearly due to tax evasion and the fraudulent practices of the tax officials. This has been attributed to many factors. Most people attribute this to the fact that the country’s tax system is highly income based and since income is taxed only at one point or stage, a lot of evasion results.

In Nigeria many different goods are consumed. For this reason, tax experts see consumption as the actual liability and as such, the need to shift tax base from income tax to consumption tax. This necessitated the introduction of sales tax in Nigeria through degree No 7 of 1986.

However, it was discovered that tax is narrow because it does not cover a lot of goods and services. This prompted the introduction of value added tax (VAT) in Nigeria

The idea of introducing VAT in Nigeria came from the report of the study group set up by the federal government in 1991 to review the entire tax system. VAT was proposed and a committee was set up to carry out feasibility studies on its implementation. In January 1993, government agreed to introduce VAT through instrumentality of the VAT Degree 102 of 1993. This was meant to be effective from January 1, 1994. It came on stream as a replacement to its antecedent, the sales tax, which was characterized by a lot of lapses inadequacies and restrictive coverage VAT is a consumption tax imposed on all manufactured goods, industrial raw material and other imported into or produced in Nigeria at a single rate of five percent potentially, its dragnet covers virtually everybody, since one consumers one thing or the other expect in the cases of specific items that are example.

Several benefits which the government expected to derive from value added tax (VAT) were enumerated. Among several others they are.

  1. Increase in revenue generation.

  2. Facilitation of administrative enforcement



  • Reduction in revenue losses through tax evasion



  1. Enhancement of documentation of transaction

  2. Encouragement of rapid industrial growth by allowing credit for input taxes for capital goods.


Maintenance of neutrality in tax payment since it is broad based and has a single rate.

The government has convened these benefits to the public and has also organized workshops and seminars to educate the producers, suppliers consumer, tax officials and the general public on VAT system in Nigeria. However the perception of tax payers is necessary  at this stage and this is what this research is to find out.

 

  • STATEMENT OF THE PROBLEM


The Federal Government has made practice efforts to convince the public of the need for VAT system in Nigeria it has informed the public of the benefits which have been derived from VAT for example a reduction in tax evasion, increase in government revenue and so on. This implies that the government sees VAT as a good tax system. But the tax payer many not have the same view as the government. They may not see the relev

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