AN APPRAISAL OF THE INSTITUTIONAL FRAMEWORK OF VALUE ADDED TAX ACT IN NIGERIA

Abstract

The institutional framework is the mechanism through which the value added tax is enforced.
Making adequate provision for smooth administration of a law to generate the targeted revenue
is quite important. The law established institutional framework for effective administration and
enforcement of Value Added Tax (VAT) Act in Nigeria. There is a conflict of role statutorily
exercised and played by the chairman of the Federal Inland Revenue Service as he doubles as
the chairman of the Value Added Tax Technical Committee. One of the major reasons of the
Technical Committee is to advise the Board. The objective of this paper is to appraise the
institutional framework of the Value Added Tax Act in Nigeria with particular reference on the
Federal Inland Revenue Service. It proffers suggestions to enhance the effective administration
of Value Added Tax in Nigeria. This paper adopted the doctrinal research methodology by
consulting statutes, textbooks and journals in conducting this research. The paper found that the
Federal Inland Revenue Service is given exclusive power to administer Value Added Tax in
Nigeria and the Value Added Tax Technical Committee is chaired by the Chairman of the
Federal Inland Revenue Service Board which it is supposed to be an advisory committee to the
Board on professional and technical issues. The paper, therefore, recommended that the Value
Added Tax Technical Committee should comprise of other professionals, experts and be made
independent of the Board to enable it performs the advisory role without interference. The
institutional framework should also be more effective in terms of administration to improve on
the revenue generation.