This write-up deals with the effectiveness and perspective of Nigerian businessmen to Value Added Tax(VAT) administration, which basically focuses on the provision of Value Added Tax Decree 102, of 1993 as implemented in January 1st 1994. The Decree replace the Sale Tax Decree of 1986 was only effective in Lagos State.Any government must find the means to pay for its own existence and for services it provides to the citizens, hence the issues of taxation in the national economy. In conventional economic analysis, however, the qualitative aspect of taxation is not much concerned with the revenue yielding capacity of a tax but with its effects on economic unit who are subjected to payment of tax. In developing economies, taxation as an instrument of resources mobilization rather than resources allocation as been established it was for this latter reason that the Federal Government of Nigeria in a bid to broaden her revenue base introduced the Value Added Tax. In recent years, empirical studies have been conducted into the reason for non-voluntary compliance with tax policies by the tax payers resulting in how tax yield. The reason being that there is a poor design in the tax structure as well as inefficient tax administrative machinery.This study attempts primarily to report the finding of an empirical investigation into the effectiveness and perspective of Nigerian businessmen to Value Added Tax (VAT).The study finds many prevailing misunderstanding and misconception about the nature, the real objective of the tax and who actually pays the tax, and also reveals some material problems, which seems to be militating against its successful use as an alternative revenue source of the government. Measure, which may help to eliminate or minimize this problems, are considered and some policy recommendation made.The study is intended to be a contribution to improve the communication of useful and adequate information by VAT officials to vatable persons so as to increase voluntary compliance level, thereby making VAT administration easier for VAT administrators and VAT adoption to the vatable public.

TABLE OF CONTENT

TITLE PAGE i

CERTIFICATION ii

DEDICATION iii

ACKNOWLEDGEMENT iv

ABSTRACT v

TABLE OF CONTENT vi

CHAPTER ONE

INTRODUCTION 1

STATEMENT OF PROBLEM 2

OBJCETIVE OF THE RESEARCH 3

STATEMENT OF HYPOTHESIS 4

DEFINITION OF TERMS 4

CHAPTER TWO

2.1INTRODUCTION 7   

2.2 FISCAL POLICY INSTRUMENT OF GOVERNMENT 8

2.3 TAXATION 10

2.4 TAX EVASION AND AVOIDANCE 13

2.5 EFFECTIVENESS, PROSPECTS AND PROBLEM OF TAX ADMINISTRATION IN NIGERIA 13

2.6 SALES TAX IN NIGERIA 15

2.7 HISTORICAL DEVELOPMENT OF VALUE ADDED TAX 18

2.8 VALUE ADDED TAX (VAT) IN NIGERIA 20

2.9 TYPE OF VALUE ADDED 29

2.10 COMPUTATION OF VAT PAYABLE 40

 CHAPTER THREE

3.1 INTRODUCTION 43

3.2 POPULATION 43

3.3 INSTRUMENT OF DATA COLLECTION 44

CHAPTER FOUR

4.0 DATA PRESENTATION AND ANALYSIS 47

4.1 DATA PRESENTATION 47

4.2 TEST OF HYPOTHESIS 55

CHAPTER FIVE

5.0 SUMMARY,CONCLUSION AND RECOMMENDATION 64

5.1 SUMMARY OF THE STUDY 64

5.2 CONCLUSION66

5.3 RECOMMENDATION67

      BIBLIOGRAPHY 68