AN ANALYSIS OF THE LEGAL AND INSTITUTIONAL FRAMEWORK FOR VALUE ADDED TAX IN NIGERIA

ABSTRACT
The Value Added Tax (VAT) was introduced in Nigeria in 1993 by the Federal Military Government. Since then, the Value Added Tax Decree, had been amended more than half a dozen times the latest being the Value Added Tax (Amendment) Act of 2007. Some of the amendments have introduced significant changes which are yet to be reflected in the body of existing literature. This article discusses the thrust and evolutionary path of the changes to the legal and administrative framework of VAT and assesses the direction of development. The aim is to succinctly discuss the current position of the VAT law and administration in Nigeria in a coherent form for the proper guidance of taxpayers, researchers and foreign investors.

CHAPTER ONE
1.0 GENERAL INTRODUCTION
1.1 Background to the Study
All over the world, taxation is the nucleus and the path to development because it is one of the formidable options to generate revenue by government. The importance of taxation lies primarily in its ability to raise capital formation of government. In some developed economies, over half of government revenue is derived from taxation. Unfortunately, there still exit a big gap in the ability of government of Nigeria at federal, state and local level to generate substantial revenue for their developmental needs through taxation. Though the reason for the near failure of taxation in Nigeria is diverse and multi-faceted, the legal framework for taxation is the major factor that inhibits taxation.

Whereas much emphasis and discussion has been on the importance of tax policy and administration in enhancing tax revenue, less has been said on the role of law in ensuring efficient taxation. Nigeria, like some other federating nations of the world has a multi-tax system which is rooted from the Constitution. It is the Constitution that laid down the taxing powers of the Federating Unit of Nigeria. In addition, the Constitution gives the Federating Unit the enablement to make laws for taxation in areas within their jurisdiction. The laws enacted at Federal and State level regulates tax policy and administration, including the establishment of tax bodies that administer the respective taxes. For instance, at the Federal level, the Federal Inland Revenue Service is established under an Act of the National Assembly, to administer all federal taxes, though other bodies such as Nigeria Custom Service, etc., also collected levies that can be classified as tax. In the thirty-six states of the federation, there is State Internal Revenue Board established under the respective State’s law to oversee the State Internal Revenue Service in tax administration. There is also a less organized Local Government Revenue Committee at Local Government level that administered taxes for which they are directly charged.

This project attempts to critically examine the ways law can be utilized to evolve effective and efficient taxation, identify legal issues that inhibit taxation; and make recommendation that will ensure a sound legal regime for taxation in Nigeria.

1.2 Statement of the Problem
Over the years, the government of Nigeria has not been able use taxation to generate adequate revenue for its developmental goals. Inequitable taxing powers, inadequate sanctions for tax violation, improper enforcement machinery and non-adherence to law in tax administration, are some of the problems of this study. Consequently, the research project will focus primarily on identifying the problems of the legal regime for taxation in Nigeria. The specific problems of this research are as follows:

1. Inequitable taxing powers and responsibility for tax collection create lopsided and uneven tax revenue in Nigeria.

2. Inadequate sanctions for tax violation motivate tax evasion.

3. Lack of well-defined tax enforcement machinery causes losses in tax revenue.

4. Non-adherence to law in value added tax administration inhibits taxation in Nigeria.

1.3 Objectives of the Study
The general objective of the study is to ascertain the legal framework of value added tax in Nigeria.

The specific objectives of the research work are:

1. To examine the impact of taxing powers on tax revenue’s distribution in Nigeria.

2. To identify how inadequate sanctions for tax violation motivate tax evasion.

3. To ascertain how tax enforcement affect tax revenue.

4. To determine the role of law in value added tax administration.

1.4 Significance of the Study
This research work is motivated by the need to ascertain the important role play by law in ensuring an effective and efficient taxation. The findings of the study have established beyond doubt that the present legal framework for taxation in Nigeria negatively affects tax revenue. It is believed that the recommendations made in the work will help the Government, Policy Makers, Tax Administrators, Tax Practitioners and Taxpayers to synergize on how to put in place a pragmatic and dynamic legal frame work that ensure enhanced taxation, and produce peoples’ complaint Tax System.

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Item Type: Project Material  |  Attribute: 65 pages  |  Chapters: 1-5
Format: MS Word  |  Price: N3,000  |  Delivery: Within 30Mins.
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