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Value Added Tax (vat) And Price Stability In Nigeria
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1.2 STATEMENT OF THE PROBLEM
In terms of contributions the total
federal collection revenue, VAT revenue at the time of inception in 1994
was anticipated to be much larger, indicating that Nigeria then may
soon join the growing list of developing countries here VAT contributes
at least 20% of total government revenue . While the performance of VAT
as a source of revenue in sub-Sahara Africa and Nigeria in particular is
clearly encouraging, it remains difficult to find attempts to
systematically asses the impact of VAT on these economies (Ajakaiye,
1999). Nevertheless, include (1989) opines policy makers considering the
adoption of VAT should be interested in the macroeconomic impact,
especially on price, output, income and consumption.
Economically,
one expect the price of VAT able goods to rise, however beyond this
expected rise, business are taking advantage of the existence of VAT the
increas4e price of goods and services arbitrarily.
The excessive
price increase according to Aruwa (2008) has further led to higher
inflation in Nigeria. Given the foregoing seeks to asses the
macroeconomic impact at VAT on price level in Nigeria.
1.3 OBJECTIVE OF THE STUDY
The study seeks to examine the following specific objectives.
I. To ascertain if any significant relationship exist between VAT and price stability in Nigeria.
II. To determine the impact of VAT on price level in Nigeria.
1.4 HYPOTHESIS
Ho1: There is no significant relationship between VAT and price level in Nigeria.
Ho2: The impact of VAT on price level in Nigeria cannot be determined.
1.5 SCOPE OF THE STUDY
The
study intends to focus on the Nigeria economy with the period 1994 to
2010. The choice of range of period is informed by the fact that VAT
policy implementation in Nigeria began by 1994. Quarterly data will be
employed to extend the sample size, but where this is not available; we
will have no choice than to use annual data for the study.
1.6 SIGNIFICANCE OF THE STUDY
Finding
from the study will be of immense benefit to policy makers in assessing
the performance of VAT on the stability of price level in Nigeria.
Secondly, it will serves as a reservoir of knowledge for further studies.
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ABSRACT - [ Total Page(s): 1 ]Value Added Tax (VAT) is a consumption tax on the value added to a product in the process of production. Like all other indirect taxes, it is a tax that targets the final consumer of goods and services. The main purpose of VAT in Nigeria is to increase government (state and Local) revenue from the non-oil sector thereby reducing the government’s dependence on oil sales and the budget deficits. In this research work my aim is to determine the stabilizing roles of VAT in the Nigerian econom ... Continue reading---
