Appraisal of the Implications of the Administration and Collection of VAT by States Governments on the Economy of Nigeria

Abstract

The taxing system of a State has a direct impact on her economy. On the other hand economic activities are indices for national development and growth. Taxation therefore is a means by which a state guarantees her sustainable revenue for sustainable development. The aim of this paper is to appraise the implications of administration and collection of Value Added Tax (VAT) by the States governments of Nigeria on the national economy. The study will review the historical context of VAT and the contemporary contentions between some States of the Federation and the federal government on the administration, collection, and sharing of VAT revenue funds. The research methodology applicable in this study is doctrinal method of research. The work discovered the constitutional lacunae over the jurisdiction on VAT administration and collection and further observed the negative impacts and implications on the economy of Nigeria in the case that States’ governments are bequeathed with jurisdiction over VAT administration. It therefore recommended among others; an explicit vesting of VAT administration on the Federal Government in her Constitution with a proviso aimed at addressing the present inequality in sharing VAT generated funds among the federating states as a way of dousing the present contest between the federal government and some states of the federation over the jurisdiction on VAT administration and collection.