VALUE ADDED TAX AND REVENUE GENERATION IN NIGERIA: A CONCEPTUAL APPROACH

The value added tax (VAT) has emerged as a significant means of generating revenue for the Nigerian Government in recent times, however with its attendant problems due to tax evasion and tax avoidance, it has continued to lower revenue. The objective of this study is to examine the contribution of value added tax to government revenue by analysing data from 1994 to 2022. The study employs secondary data sourced from the Federal Inland Revenue Service (FIRS) and the bulletins of the Central Bank of Nigeria (CBN) within the period of review. The study is underpinned by fiscal theory of taxation as well as optimal taxation theory, it primarily utilised descriptive statistical approach to analyse the data. The study concluded that value added tax contribution to revenue generation in Nigeria was extremely low; despite its huge beneficial impact on revenue generation in absolute terms. The study suggested that the Federal Government of Nigeria should persist in enhancing the administration and collection of Value Added Tax (VAT) in order to further augment its contribution to the government revenue.