CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Prior to 1993, only very little was known of Value Added Tax (VAT) in Nigeria. The idea of VAT started with the acceptance of the recommendation of Dr Sylvester Ugoh led study group on Indirect Taxation in November 1991. The decision to accept the recommendation was made public in the 1992 Budget speech. (Okpe, 2001). In addition, according to Obianwuna (2005), the Federal Government set up two study groups in 1991, one was set up by the Federal Ministry of Finance and Economic Development to study and recommendation on the reform needed in direct taxes in Nigeria. The Federal Ministry of Budget and Planning set up the other group on indirect taxation. As the group recommended the introduction of VAT in Nigeria, this made the Federal Government to set up a committee who will carry out a feasibility study on its implication in Nigeria. This committee gave the general guideline for the establishment of a Value Added Tax in Nigeria and its administration was given to the Federal Inland Revenue Services, which was already charged with the responsibility of administering most other taxes in Nigeria.
The introduction of VAT in Nigeria through Decree 102 of 1993 makes the phasing out of the Sales Tax Decree No. 7 of 1986. The decree took effect from 1st December 1993 but by administration arrangement invoicing for the purpose did not commence until 1st January 1994, (Okpe 2004).
Value Added Tax (VAT) was introduced in Nigeria in 1993 at a flat rate of 5% on all the vatable goods and services. The rate was increased to 10% by the Federal Ministry of Finance with effect from May 2007. However, following a
Terms of Use: This is an academic paper. Students should NOT copy our materials word to word, as we DO NOT encourage Plagiarism. Only use as a guide in developing your original research work. Thanks.
Disclaimer: All undertaking works, records, and reports posted on this website, eprojectguide.com are the property/copyright of their individual proprietors. They are for research reference/direction purposes and the works are publicly supported. Do not present another person’s work as your own to maintain a strategic distance from counterfeiting its results. Use it as a guide and not duplicate the work in exactly the same words (verbatim). eprojectguide.com is a vault of exploration works simply like academia.edu, researchgate.net, scribd.com, docsity.com, course hero, and numerous different stages where clients transfer works. The paid membership on eprojectguide.com is a method by which the site is kept up to help Open Education. In the event that you see your work posted here, and you need it to be eliminated/credited, it would be ideal if you call us on +2348064699975 or send us a mail along with the web address linked to the work, to eprojectguide@gmail.com. We will answer to and honor each solicitation. Kindly note notification it might take up to 24 – 48 hours to handle your solicitation.