- AN ASSESSMENT OF THE IMPACT OF BANK CREDIT ON AGRICULTURAL DEVELOPMENT (A CASE STUDY OF FIRST BANK OF NIGERIA PLC)
- CAPITAL MARKET IN NIGERIA, ITS EVOLUTION, FUNCTION AND IMPACT ON THE ECONOMY
- THE IMPACT OF PERFORMANCE EVALUATION THROUGH THE ANALYSIS OF FINANCIAL STATEMENT ON INVESTMENT DECISIONS (A CASE STUDY OF LOGMAN NIGERIA PLC.)
- THE EFFECT OF FORWARD INTEGRATION ON PERFORMANCE OF MANUFACTURING INDUSTRY (A STUDY OF CADBURY NIGERIA PLC)
- THE EFFECT OF GOVERNMENT EXPORT PROMOTION POLICIES ON THE DEVELOPMENT OF EXPORT BUSINESS IN NIGERIA (A STUDY OF THE NIGERIAN EXPORT PROMOTION COUNCIL [NEPC])
- ASSESSMENT OF THE IMPACT OF BANK CREDIT ON AGRICULTURAL DEVELOPMENT (A CASE STUDY OF FIRST BANK OF NIGERIA PLC)
- ECONOMIC EFFECT OF ADVANCED FREE FRAUD IN THE BANKING SYSTEM IN NIGERIA
- IMPACT OF COMMERCIAL BANKS IN AGRICULTURAL FINANCING IN NIGERIA (A Case Study of First Bank Nigeria Plc.)
- THE IMPACT OF BANK FRAUD AND DISTRESS ON BANKING HABIT IN NIGERIA (A CASE STUDY OF FIRST BANK, GTB, UBA, UNION BANK AND ZENITH BANK)
- THE IMPACT OF ELECTRONIC BANKING ON THE PERFORMANCE OF BANKING IN NIGERIA (A Case Study of Eco Bank Plc)
THE IMPACT AND EFFECT OF VALUE ADDED TAX (VAT) ON GENERAL PRICE LEVEL IN NIGERIA ECONOMY
TABLE OF CONTENTS
1.0 Background of the Study
1.1 Objective of the Study
1.2 Significance of the Study
2.1 Literature Review
2.2 Definition of Value Added Tax (VAT)
2.3 History of Value Added Tax (VAT) Between 1960 to Date
2.4 Objectives of Value Added Tax Administration in Nigeria on General Price Level in Nigerian Economy
2.5 Effect of Value Added Tax on Price Level in Nigeria
2.6 Advantages of Value Added Tax to Nigeria
2.6.1 Disadvantages of Value Added Tax to Nigeria
1.0 BACKGROUND OF THE STUDY
The Value Added Tax (VAT) has been developed and adopted by many countries in the last forty years. VAT was not more than a theoretical preposition among fiscal scholars. Today, in its comprehensive form, VAT is an important part of the fiscal system in many countries.
The first country to import VAT in its comprehensive form was France in 1954. It was imported later to the French speaking countries were operating one form of VAT or the others. The first developing country to impose tax in its comprehensive form was the Brazilian State Government in 1957, when they abolish many various sales taxes and replace them with a single value added tax as a means of ensuring co-ordination in all the twenty six state in Brazil.
The International Monetary Fund and the World Bank, two agencies of the United Nations organisation which are closely identified with the establishment and continued operation and monitoring of SAP have advised that the tax system in Nigeria needed less dependent on revenue derived from petroleum products.
As one of the means of raising additional non oil revenue locally, the introduction of VAT was suggested to the Federal Government to replace the existing sales tax in furtherance of the tax returns, the federal government set up two study groups in 1991. One was set up the new federal ministry of finance and economic development to study and make recommendation on the reforms needed in the direct taxes in Nigeria.
The other study group of indirection taxation (which is none relevant here) was set up by the federal ministry of budget and planning and inaugurated on 20th April, 1991 by the honouarable minister of budget and planning with the objectives of:
· Shift taxation towards consumptions (indirect)
· Provide incentive for export promotion
· Reduce dependence on (petroleum) oil revenue
· Maintain a fairly even tax incidence across various levies, stages and elements of production.
It was this committee that gave general guidelines for the establishment of VAT in Nigeria. It started with the acceptance of the recommendation on the study group in Nigeria tax system and administration in November 1991. Consequently, the decision was made public in the 1992 budget. This resulted in the setting up of modified value added tax (VAT) committee on 1st June 1992, recommended by the study group.
The major objective of 1994 fiscal policy is to reduce deficit expenditure to a sustainable level. taxation as the oldest tool of economic management has deepen root in Nigerian economy. The federal government therefore decided to abolish the sales tax and at the same time consider its prospect and impact or effect on general price level index.
1.1 OBJECTIVE OF THE STUDY
The primary objective of this research is to identify crees of value added tax, which requires strengthening in order to cope with the complex and dynamic nature of the value added tax on general price index level. specifically the objective of this research study are to:
· To determine the impact and effect of value added tax on general price level.
· Determine the primary aim of raising revenue to finance government expenditure
· To identify the factor influencing the economic activities
· Determine the allocation of resources in a socially desirable manner.
· To achieve equitable distribution of income and wealth.
· To combat depression, inflation and deflation.
· To ensure that economic growth is achieved.
1.2 SIGNIFICANCE OF THE STUDY
This project is aimed at bringing to light the prospect and impact of value added tax and its effect on the general price level. It is my hope that this project will show the effect of VAT on consumers demand in Nigeria and how it either increase or decrease price of goods or items price generally. Moreover, it is also hoped that this research will bring forth the advantages and disadvantages of VAT on the Nigerian economy.