A  research  into the implications of Nigerian value Added Tax [VAT] on the payers [ a case study of Enugu State ] cannot be over –emphasized .
 In pursuance of this investigation , the research used both primary source  of data collection , like oral  interview as well as secondary sources such as textbooks , Journals ,Magazines and professional bodies . The data collection were then analysis using simple percentage , pie chart and the chi- square .    It will be noted that any VAT depends  on the value Added and there is no way VAT could  be attempted in isolation of this value Added. Since VAT also depends on income and profitability of individuals and companies, the quest for VAT should be planned and coordinated
        Effect was made in this research work to investigate on the constraints encountered in the imposition of VAT and also in the recommendation were given the way of overcoming them .
  This study is obvious if we should realize that this work will enable us to know this contribution from VAT has helped in the Nigerian general economy so far and know if it worth it or not.
    The project is divided into five chapters in which the first chapter deals with the introductory part , statement of the problem, purpose of the study , significance of the study, research hypotheses , scope and limitations and definition of terms.
       Chapter tow deals with review of related literature as related to VAT  and as it affects the tax payers, definition of VAT. The evolution of Value Added Tax , why modified value added tax in Nigeria , sales tax and value added tax , value added tax in Nigeria and the implication of VAT don the tax payers .
    Chapter three deals with  research design and methodology  used , primary , secondary, sources of data analysis , population and sampling procedures.
       In chapter four was discussed , define presentation and analysis and testing of hypothesis
    Chapter five finally deals with findings , conclusion and recommendation.
1.0       Introduction
1.1    statement of problem
1.2    Purpose of study
1.3       Significance of the study
1.4    Research hypothesis
1.5    Limitation scope of the study
1.6    Definition of terms
2.1 The value added tax defined
2.2 Evolution of value added tax
2.3 Why modified value added tax  in Nigeria
2.4 Sales tax and value added tax
2.4Value added tax in Nigeria
2.6 The implication of VAT on the taxpayers
3.1 Geographical area of the study
3.2 Target population
3.3 Sampling size and procedure
3.4 Data collection techniques
3.5 Questionnaire design
3.6 Administration of instrument and validity               
4.0 Data presentation and analysis
4.1 Data presentation
4.2 Test of hypotheses
5.0 Summary of findings, conclusion and recommendations
5.1 Findings
5.2 conclusions
5.3 Recommendations
 Taxes in modern economics are the most important source of government revenue. The are compulsory levies that are regularly imposed, and as a rule, not designated for a special purpose they are regarded as a contribution to the general revenue pool from which most government expenditure are financed.
       Taxation occupies a principal position in the Nigerian economy as in other countries. Value – Added –Tax was introduced in Nigeria currently to replace the old sales tax. The old sales tax, has been in operation under the federal government legislated decree No 7 of 1986, but it is operated on the basis of residence
   However , the newly introduced value added tax is operated under the federal government legislated decree No 102 of July 1993. VAT  is a form of indirect tax whose burden is shifted from the manufacturers through the distribution channels to the final consumer who then bears the final burden
    Value added tax came into effect on 1st January 1994 the tax is a tax on consumption. VAT is a multi stage tax which is impose on goods and services as they pass through the various stages in the business chain. From manufacturing, importation through wholesales to relating.  The payment is borne by the final consumer because it is included n the selling price ,it’s administration involves a credit mechanism system whereby a taxable person who is charged tax on the supplies to his entitled to set off that tax against the tax charged by him is supply to other persons , this making him only accountable for the excess of the tax on the supplies from him over the tax on the supplies to him.
       The tax paid or payable by a taxable person on the importation of a business carried on by him is known as his ‘input tax’ while the tax paid on the supplies made by him  is known as his ‘out put tax’. The VAT payable in essence is the output tax , less input tax.
       The tax on the supply of goods or services is chargeable only where:-
n  The supply is a taxable supply and
n  The goods and services are supplied by a taxable person in the course of a business carried on by him and is payable by the person supplying the goods and services .    
       VAT in Nigeria is computed at a flat rate of 5% of the price of the goods and services. This is affected on behalf of the government by business and organization that have registered for VAT purpose . VAT is operated by over ,sixty countries including some countries on the west of Africa .
   In Nigeria , two agencies of the muted nations organization the international monetary fund [IMP] and the world bank which are closely identified with the establishment and monitoring of the structural Adjustment programme [SAP] had since 1987 been advising that the Nigeria tax system need to be reformed so that the government  will be  less dependant on the petroleum revenue  generation .
   In an attempt  to effect this reformation of tax system , the federal government set up two tax study groups in 1991 . The federal ministry of finance and economies development set up one study group to study and make recommendation on the reforms needed in direct taxes in Nigeria . The federal ministry of budget and planning set up another study group which   is more relevant to our study on indirect taxes and inaugurated on 26th April in 1991 with the objectives of among other to :
-Shift  taxation towards consumption rather than saving .
-         Improve the administration of indirect taxes.
-         Provide incentives for export production.
-         Maintain a fairly ever tax incidence.
-         Reduce dependence on oil revenue.
        The general guideline for the establishment of value added tax in Nigeria was given by this committee . value Added tax was introduced into Nigeria economy tax  system in January 1st  , 1994 ,following the elegant provision of decree No .102 of July , 1993 but it has been in operation in other countries before it was  introduced in Nigeria .
     In the Nigeria context, it is a consumption tax of five percent [5%] imposed on every vat able goods and services of every stage of production
      The buyers of goods and services in the case of value Added tax are taxed and this is country to sales tax where the produces or sellers of goods and services pay the tax .
     The final cousumers of these vat able goods and service bear the burden of the tax . AS a result the project topic which form the  center of the study that is the implications of VAT on the payers .
 1.1                                   STATEMENT OF THE PROBLEM
             Much as it is known that VAT will increase the  revenue base of Nigeria , it cannot be free from some problem . In view of the compulsory nature of and strong aversion of tax [VAT] payment effects must be constitute  made to make any tax system as attractive and as conveniently as possible .
   This can be achieved by regularly evaluating the tax system with a known set  of criteria  modified to suit the pervading circumstance of time .
      The Question which this reseach work aims at answering could be summarized into  the following problem statement :
1Corporate performance could be improved upon under  the value added tax. How realistic is this assumption ?
2                   Given the percent economic situation and industry condition , how are individual / companies dealing on goods and services which  are  subject to VAT  , going to the affected by this tax system.
3                   With the apparent difficulty encountered by firms in holding down costs, and give the incentives in VAT accruing to firm operating at minimal costs, have a company’s pricing policy most likely to be affected.
           Industrialists, manufacturers , distributors , individuals and organization have not accept VAT ,they are the opinion that VAT is not good for a developing country like Nigeria. The problems  of enforceability has to be tackle by employing honest and truthful personnel who will enforce the payment of VAT so levied severe penalties has to be adopted so as to enforce  payment by VAT defaulters.
  The purpose of the study is find out the extent to which the tax in investigation , VAT will imply to the tax payers and final consumers. Thus the study is designed to investigate the implication which value added tax will have on the tax payers , that is the relationship between the tax and those paying it in the Nigerian context of tax system.
This work is of academic significance in the sense that it will contribute to the understanding of the Value Added Tax  and it’s implication on tax payers. The practical significance lies on the fact that the work would highlight the extent to which tax payers could take advantage of the opportunities in the tax system to improve their standard of living even of greater importance is the potential of this study in throwing more light on the unintended adverse effects of the tax on some industries
  Hypotheses 1  
Ho : VAT is tax based on  consumption of goods and services .
H1 : VAT is not tax based on  consumption of goods and services .
Hypotheses 2
 Ho :there are effect on the price of variable goods and services
H1 :there is no effect on the price of variable goods and services
    There are certain  complex and unfamiliar technical  terms which needs to be clearly defined as regards their usage , applied to this study for easy understanding , there  are explained in a way as to make their contextual usage   clear to the reader.
i)                   VAT : This  is a tax of the supply of goods and services which is eventually borne by the final consumer , both collected at each stages of production and distribution chain.
ii)                VARIABLE GOODSSREVICES: These are goods or services that subject to VAT. There are list of these goods and services in the appendix
iii)                 VARIABLE PERSON: These are business organization that are registered for VAT purpose , the firms collect VAT from the customers and rant to the Vat secretarials.
iv)              TAXABLE  PERIOD : This is the period covered by any particular return. In Nigeria the taxable period is one month , in other words the returns and payment are normally made monthly  to the local VAT office  on or before the 14th day of the month next following that in which the supply was made.
v)                TAX INVOICE : This is the key to any credit claim on VAT.   Whenever a person supplies a variable tax invoice in support of the transaction and take a copy for himself
vi)              OUTPUT TAX: These are taxes paid by variable  persons on the supplies he made.
vii)           INPUT TAX: These are those VAT paid by the customers and collected by the variable persons.
viii)         ZERO RATED GOODS: These are goods that attracts a VAT rate of 0% while the normal rate of VAT in Nigeria is 5% for all goods and services variable
ix)              CHI-SQUARE: This is the statistical techniques used in testing the hypothesis concerning the difference between a set of observed frequencies of a sample and a corresponding set of expected frequencies
x)                DEGREE OF FREEDOM : This is the range within which the hypothesis is to be tested.
xi)              CONFIDENCE LEVEL : The level of limit within which we may be confident that the population mean lies.
xii)           TAX INCIDENCE : This is the final person(s) who bear the tax burden .
xiii)         NIGERIA ECONOMY : This is the aggregate out put of Nigeria as a whole.
xiv)         TAX SYSTEM : This is the way tax is being regulated and administered
xv)           SALES TAX: This is the tax imposed on the sales of a commendation usually collected at whole sales or retail stages.


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