VALUE ADDED TAX AS A TOOL FOR REVENUE GENERATION

Some years back, the agricultural sector was playing an important role in the Nigeria economy both in generating revenue and in the physical impact. This was before oil started its own impact on the economy. The impact created by the oil sector begging to be more relevant within a short period of time. Other sectors of the economy become secondary in terms of their relevancies. The sectors were neglected in the favour of oil.
Oil thus becomes the leading factor and the leading product in term of revenue generating and foreign exchange contribution. The condition of the economy became vulnerable to the condition of the word oil market form 1970 till date. The fluctuation of price in the world of oil market in the Nigeria economy is a significant factor to the revenue to be generated. This is by diversifying the revenue generated based on the higher economy. In addition to the above mention situation, the Nigeria state was increasingly acquires ring national responsibilities along with the traditional role of the government.
 
The financial requirement of the government has been increased over the years in facilitating the accomplishment of government functions. Worthy of mention is this connection in the effective way of revenue generation and collection by the government against responsible for the task. The idea of introducing Value Added Tax (VAT) was therefore considered and the federal government finally approved its introduction. Value added tax is therefore expected to increase and be effective, contribute towards enhancing the revenue generation based on the government. The system is expected to minis of eliminate the corrupt practices associated with revenue assessment and collection. The important of revenue in any country and of course Nigeria cannot be overemphasized. Revenue has been the bedrock of government performance. The history of revenue in Nigeria dated to the pre-colonial era when tax and levies were paid to the fathers or lord as the case may be to Oba’s, Kings, Emirs.
 
The tax or levies were to be paid in cash or in kind during the pre-colonial era. It was used to support the sustenance of the colonial administration. It has even been used to mobilize farmers into cash crop production mainly for the colonial export through the use of the cash taxes. Even after independency, tax has played in important role in generating revenue for the government. It was used for the running of the affairs of the post independence government in Nigeria. Furthermore, it has also been used to achieve other policies such as the protection of the infant industries, income re-distribution, checking and controlling the consumption of some certain goods, etc. it is therefore very much likely that it will continue to play a very important role in Nigeria economy. Following the difficulties, Irregularities, complains associated with the assessment and collection of the said tax, operation committee was set up by the Federal government in 1991 to review the entire tax system in operation. The committee recommended the idea of introducing Value Added Tax (VAT) in the country and another committee was set up to undertake the feasibility study and make recommendation on its implementation after which the government finally approved the introduction of value added tax in Nigeria tax system with effect from 1st September 1993 and was incorporated in the 1994 budget. Therefore, this study seeks to examine Value Added Tax as a means of revenue generation for economy development. 
There have been efforts by the Federal government to increase the revenue base of the economy for better development, and approval growth of the Nation economy. Therefore, this research is carried out to establish the position of Value Added Tax on the overall Nigeria tax system. The ineffective impact of generating revenue for the government and controlling irregularities wildly believed to be associated with the said tax.
The following questions were asked during the research of this project. They are:
1)   How successful has the introduction of value added tax (VAT) been in Nigeria.
2)   What are the relationship between value added tax(VAT) and other forms of taxation.
3)   What are the problems associated with the admission of value added tax(VAT)?
4)   And how can we make it very effective to the needs of Nigerian?
5)   What are the advantages of value added tax (VAT) in generating revenue in Edo state?
The objective of this study includes:
1)  To examine the introduction of the value added tax (VAT) as a system of taxation in Nigeria.
2)  To investigate the relationship between Value Added Tax and generation of revenue through other forms of taxations.
3)  To find out the problem associated with the administration of VAT since its introduction and also to give recommendation on how o make VAT very effective and responsible to the need of the Nigerians.
4)  The study also intends to find out the advantages of Value Added Tax (VAT) in term of generating revenue in Edo state.
It is also set to find out beyond technical level practical problems associated with it and to make recommendation at the end of the study.
The significance of the study is that government is in need of money to execute its increasing projects. Having introduced VAT to replace the sole taxation, to escape the difficulties in the old system. The study will be of benefit by enhancing the effective implementation and achievement of the objective, as such; VAT should be regarded as worth and should be encouraged and supported.
The benefactors of the study of Value Added Tax (VAT) are:
1)   The government
2)   The citizens
3)   The investors (foreign and local)
This study is very important, as the value added tax is a new or a modified system, which has a lot of significance. The public needs to be educated on its operation. The study will bring the outstanding between the government, the populaces (the tax payer) and the tax authorities together
Proper knowledge of the Values Added Tax would bring increase return to the government as a result of the compliance by the payer and proper record keeping by the officials.
The scope of the study is to cover the introduction, the implementation, problem and prospect of VAT and its relationship with revenue generation in Edo state. The line frame will cover from its introduction in 1993 till date. In addition to this all data and information to be used will be from area office of the Edo State Board of Internal Revenue.
The terms used in this study on the of Value Added Tax are define as follows;
Value Added Tax: This is the tax impose on the value of goods and services in the country either imported or exported which the surlier or the sellers of the goods add to it.
Economy: This means control and management of money, goods and services in a country.
Goods: The term goods cover all tangible and intangible assets                                 and commodities that are traded for considerations.
Supply of goods: This includes delivery and transfer of goods arising from contractual or legal action or transaction though agents.
F.I.R.S:  Federal Inland Revenue service, it the operation of Federal Board of Inland Revenue.
F.B.I.R:  the means Federal Board of Inland Revenue.
Legislation:  This deal with the aspect of making laws in the system of tax.
VAT on input: This is the VAT on the purchase of goods and service on a notable person.
Output VAT: This is the VAT charged on the sale of goods and services it is the VAT paid to the F.I.R.S after vat on the purchase of such good or supply has been deducted.
Vatable person: This means any person co-operates or incorporates who trade in Vatable goods and service for a consideration.
The study is concentrated on the advantage of Value Added Tax (VAT) in terms of revenue generation and its operation in Edo state Board of Internal Revenue office. Value added tax (VAT) as a new introduced system of tax. The study was faced with a problem of its own which limited the research system. Some of the limitation is as follows;
a) Non-availability of books and journals etc. due to lack of relevant textbook, journals and magazine, the other relevant articles or publication on the subject matter through which one could easily collect his materials for the literature review in this research work.
b) The effect of scarcity of data: The issue of scarcity of data arose were some private organization refuse to disclose some information on their record keeping on Vat and especially on returns rendered to the government.  
c) Time: Due to shortage of time, the study was carried out in Edo State only. Time did not allow for wilder research in other state of the federation. It was not easy to collect most of the questionnaire distributed due to the fact that the people who the questionnaire were given never got it ready at the appropriate time. They gave appointment for it to be collected. Some even said that they missed the questionnaire.