AN EVALUATION OF THE EFFICIENCY OF CONSUMPTION TAX ADMINISTRATION IN NIGERIA: 1985 - 1994
AN EVALUATION OF THE EFFICIENCY OF CONSUMPTION TAX ADMINISTRATION IN NIGERIA: 1985 - 1994
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Date
1996-12
Authors
SILVA, ZAINA MARGARET
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Abstract
ABSTRACT
Taxation is one of the tools employed by governments to generate
revenue, regulate the economy, and change markets for certain goods and
services. Consumption taxes, which are generally levied on producers or
distributors, are generally passed on to consumers in higher prices. The
general sales taxes, which are consumpt on taxes, are usually classified
mto the turnover tax, single-stage sales taxes, and the value added tax
(VAT).
In Nigeria, two consumption taxes have been implemented on a
nationwide basis, namely, Sales Tax (1986 - 1993) and VAT (as from
1994). The Sales Tax failed to achieve its goal of bringing considerable
revenue to the State Governments. It was replaced with VAT in the hope
that VAT would redress Nigeria's over-dependence on crude oil sales as
the main source of revenue.
The thrust of this study has been to examine and evaluate the
implementation, administration and productivity of Sales Tax and VAT
with a view to determining if the actual operation of the VAT system in
1994 was an improvement over the operation of the Sales Tax system prior
to 1994. The study also attempted to draw a conclusion about the ability
of VAT to redress Nigeria's heavy dependence on oil revenue.
This study revealed that VAT is more equitable than Sales Tax in
its coverage of the economy; greater attention was paid to developing clear
and practicable tax regulations and tax return forms for VAT than for
Sales Tax; tax payer compliance was generally greater with respect to
VAT than for Sales Tax; and nation-wids VAT yield in 1994 alone was
nearly seven times the total nation wide revenue generated by Sales Tax
during its eight-year duration under Decide No. 7 of 1986.
However, the implementation of VAT shares some of the problems
associated with Sales Tax, such as inadequacy of facilities and resources
to cope with the actual population of VAT-able persons in each state, and
inadequate implementation of audit and investigation procedures. It was
also observed that penalties for non-compliance or other offences were
rarely imposed.
Despite the administrative difficulties encountered in VAT
administration, it was observed that VAT was better organised, publicised,
and implemented than Sales Tax; and if VAT continues to be administered
with the same zeal and efficiency which characterised its first year
operation, it will bring in substantial revenue to the Federal Government
and the states.
The study concluded by offering some suggestions to the Federal
Inland Revenue Service to improve VAT administration and thereby
increase VAT yield.
Description
A DISSERTATION SUBMITTED TO THE
POSTGRADUATE SCHOOL, AHMADU
BELLO UNIVERSITY, ZARIA, NIGERIA IN
PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR THE AWARD OF
THE DEGREE OF MASTER OF SCIENCE
(ACCOUNTING & FINANCE
Keywords
EVALUATION,, EFFICIENCY,, CONSUMPTION,, TAX,, ADMINISTRATION,, NIGERIA:, 1985 - 1994