ADMINISTRATION AND COLLECTION OF VALUE ADDED TAX (VAT) IN GOVERNMENT PARASTATALS IN ENUGU AND ANAMBRA STATES, NIGERIA

ABSTRACT

The purpose of the study was to assess the administration and collection of Value Added Tax (VAT) in government parastatals in Enugu and Anambra States. A structured questionnaire made up of 38 items in addition to 24 checklist were used to obtain information for the study. Five research questions were answered while four hypotheses were tested at 0.05 level of significance. The study adopted a descriptive survey design. The population for the study consisted two hundred and thirty three staff from 3 Federal Inland Revenue Service and 61 government Parastatals. There was no sample because the entire population was studied. The research instrument was subjected to face validation by five experts, made up of two lecturers from the Department of Vocational Teacher Education, one from the Department of Accountancy, one from Department of Art Education and one from Measurement and Evaluation, all in University of Nigeria. The Cronbach Alpha Reliability was used to test internal constancy and a Coefficient of 0.77 was obtained. The questionnaire was administered personally by the researcher with the help of two trained research assistants. A total of 227 copies out of 233 copies of questionnaire administered were returned and analyzed for the study. Hypotheses were tested using one way analysis of variance (ANOVA). The findings of the study showed that credit, subtraction and addition methods were variously utilized in collecting VAT revenues. It was also found that studying invoices and auditing of returns submitted to local VAT office were effective in detecting and preventing tax fraud. It was recommended that the management of Federal Inland Revenue Service (FIRS) should regularly review revenue generating performance so that the administrators would know when to intensify effort in monitoring the activities of staff and tax payers.