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          Taxation has long been practice in Nigeria. Initially, only men were expected to pay taxes but now all people working and anybody found in the capacity of paying tax are obligated to pay tax.

          Tax in a mandatory levy on income charged for the purpose of carrying out government activities losses incurred by government in recent times through tax evasion are increasing rapidly despite the pathetic financial and economic state of the country. There are daily report on newspaper and magazines that government losses billions of naira yearly due to tax evasion and the fraudulent practices of the tax officials. This has attributed to many factors. Most people attribute this to the fact that the country’s tax system  in highly  income base and since income is taxed only at one point or stage, a lot of evasion results.

          In Nigeria, many different goods are consumed. For this reason, tax experts see consumption as the actual habit and as such, the need to shift tax base from income tax to consumption tax. This necessitated the introduction of sales tax in Nigeria through degree N0. 7 of 1986.

          However, it was discovered that sales tax is narrow because it does not cover a lot of goods and services. This prompted the introduction of Value Added Tax (VAT) in Nigeria.

          The idea of introducing VAT in Nigeria came from the report of the study group set up by the Federal Government in 1991 to review the entire tax system, VAT was proposed and a committee was set up to carryout feasibility studies on its implementation. In January 1993, government agreed to introduce VAT through instrumentality of the VAT Degree 102 of 1993. This was meant to be effective from January 1 1994. It came on stream as a replacement to its antecedent, the sales tax, which was characterized by a lot of lapses inadequacies and restrictive coverage. VAT is a consumption tax imported on all manufactured goods, industrial raw material and other imported into or product in Nigeria a single rate of five percent. Potentially, its draguel cover virtually everybody, since one thing or the other except in the cases of specific items that are exempted. 

Several benefits which the government expected to derive from value added tax (VAT) were enumerated. During several others they are

i.        Increase in revenue generation

ii.       Facilitation of administrative enforcement

iii.      Reduction in revenue losses through tax evasion

iv.      Enhancement of documentation of transaction

v.       Encouragement of rapid industrial growth by allowing credit for input taxes for capital goods. 

vi.      Maintenance of neutrality in tax payment since it is broad based and has a single rate.

The government has conveyed these benefits to the public and has also organized workshops and seminars to educate the producers, suppliers, consumers, tax officials and the general public on VAT system in Nigeria. However, the perception of taxpayers is necessary at this stage and this is what this research is to find out.


The Federal Government has made prantic efforts to convince the public of the need for VAT system in Nigeria. It has informed the public of the benefits which have been derived from VAT, for example, a reduction of tax evasion, increase in government revenue and so on. This implies that the government sees VAT as a good tax system. But the tax payer may not have the same view as the government, they may they will most definitely be reluctant to pay.

          The problem or the question therefore, is what is the perception of the taxpayers or the public on tax systems? Do they see it as being important as the government does? It is in view of the above questions that the researcher has decided to find out and evaluate the perception of the public or tax payers on the valued added tax in Nigeria. 


It was the purpose of the study to evaluate the views of the tax payers on Value Added Tax (VAT). On the basis of this, the researcher will be able to say if VAT has done more harm than good on the part of the tax payers. The finding will also enable me make recommendations that will bring about modification if necessary, that will strengthen the machinery for the administration of VAT and also to its acceptance by the public.


Every research work has to be significant. It must either create some form of new knowledge, or add to an already existing body of knowledge. To this end, this study will serve as information to the government to known the perception of the tax payers on VAT. It will also reveal areas in the VAT system that require correction in order to achieve a more effective and efficient tax system


For the information presented in a research  work to be  clearly understood and appreciated, a systematic and chronological presentation of  the work is of  greater importance. In keeping with this, this research has been organized and presented in five chapters;

Chapter One:      This is the introduction chapter and it informs the reader on what the entire study is about. According to Ochei C.A. (1994:5) the chapter specifies the problems that prompted the study, the assumptions of the study and the operational definition of terms.

Chapter  Two:     This contains the review of all related  literature, or previously existing materials or the subject. This chapter establishes clearly the nature of the already existing body  of  knowledge, thoughts, ideas, concepts on the subject thereby  highlighting the new knowledge to be generated by the research.

Chapter Three:             information on the method employed in the collection of data and their analysis can be found in this chapter. Also in this chapter, justification is provided for the adoption of the methods and analytical techniques employed.

Chapter Four:     this involves the presentation and analyses of data findings from the testing of hypothesis are also presented here.

Chapter Five:      This is the final chapter and it contains the summary of the entire work done, the conclusions down, and the recommendations made by the researcher based on the findings of the research work.

Appendices:         it is usual practice that in the final pages of research work, reproductions of some document such as questionnaire relevant tables, statute, letters and so on attached for a better appreciation of the research work by the reader. This can also serve as a means of verification work done.


          The questions below are to be answered in the course of this work. If at the end of this research, appropriate answers are provided to these questions, the aim of this research shall have been realized. The questions are: –

          1.       To what extent has VAT curbed tax evasion?

2.       To what extent has the government been able to generate excepted revenue?

3.       Is the administration of VAT in Nigeria preceded to be efficient?

4.       To what extent is VAT a good replacement of sales tax?

5.       Is VAT a fair and equitable tax?

6.       What impact does VAT have on the revenue generation of the government?

7.       Has the institution and implementation VAT affects con consumption habits of consumer.


          1.       H0 :    Value Added Tax is not expected tax evasion

          2.       H0:     Tax payers are not perceived to be favoured

                   with VAT system

3.       H0:     Tax payers do not believe the merits of VAT affect their response to payments.   


a.       VAT: This is a consumption Tax which is charged 5% on goods and services, which are not exampled by the VAT degree of 1993.

b.       Vatable goods:     These are goods and services, which VAT is paid

c.       Supplies:    This refers to any transaction whether it is the sale of goods or the performance of a service for a consideration.

d.       Vatable person:    One who trades in vatable goods or services for a consideration.

e.       Output VAT:       This is VAT that is due on vatable supplies. It is derived by multiplying the tax value of the aggregate supply by the tax rate.

f.       Input VAT: This is charge on business purchases and expenses

g.       Federal Inland Revenue Service (FIRS):     This is the authorized body for the collection of taxes.

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