Value Added Tax (VAT) was introduced in Nigeria by the report of a study group set up by the federal government in 1991 during the regime of the military president, General Ibrahim Badamasi Babangida.

The study group came up with Value Added Tax (VAT).

The alternation of the bases of tax and the credit system brought to tax led to the promulgation of the Vat Decree became effective from 1^st December 1993.

This idea, that is the introduction of VAT in Nigeria must be managed implement and administered by somebody. From the topic, administration can be seen as the ways and manners by which an institution, group, board, parastalals, government establishment etc are being run.

The day to day activities of an establishment will be channeled, run and administer for Vat to be effective, their must be an effective and efficient administration in the execution of Vat policies because of alternatives and uncertainties before them, the risk of making a wrong decision or choice in the administrative cadre will hinder the progress of Vat in the country.

This is why efforts have been made to select capable hands and brains to man the affairs of Vat as established by Value Added Tax Decree (VATD) of 1993.

The VAT are administered by Federal Board of Inland Revenue (FBIR) sub-section of provides that the board (FBIR) may do such thing as it may seen necessary and expedient for the assessment and collection of tax and shall account for all amount so collected in accordance with the provision of this decree with reference to section 3; paragraph 7, sub section 1 (3.7 (1) of the Value Added Tax Decree (VATD) no 102 of 1993.

This research work will look into the effectiveness and efficiency of administration of VAT, merits and demerits.

1.2 THEORETICAL BACKGROUND

The Value Added Tax (VAT) is a specially tax that charges establishments ten percent (10%) of their turnover in a year.

This institution was established in 1993 as promulsented by VAT Decree (VATD) N0. 102 during the General Ibrahim Badamasi Badangida regime:

The idea of introducing Value Added Tax (VAT) in Nigeria came as a report of the study group set up by the Federal government in 1991. In January, 1993 government agreed to introduce VAT by the middle of the year, which was later shifted to September, 1993.

The alternative of the bases of tax and the credit system brought to tax led to the promulgation of the VAT Decree (VATD) N0. 102 at 1993 through the Decree came effect from 1^st December 1993, the full effect implication commenced from January 1^st, 1994.

According to Encyclopedia American Vol. 27 (1981) VAT was First Instituted in France in 1954 being the result of over hurling of turnover tax introduced on called “Taxes Surla Values Ajouta (VAT).

The administration of VAT is established as contend in section 3, paragraph 7, subsection 1 of the VAT Decree N0. 102 of 1993, the tax shall be administered and managed by the Federal Board of Inland Revenue (FBIR) may do such thing as it may seen necessary and expedient for the assessment and collection of tax and shall account for all amount so collected in accordance with the provision of this decree.

The administrative body of VAT comprise the VAT technical committee and they are changed with the following functions as contend also in section 17 of the VAT decree of 1993 state that there is hereby established committee to be known as the value added tax technical committee which shall comprise of a chairman of the Federal Board of Inland Revenue (FBIR) A Director in Nigeria Customer (NCS) and three representative of the state government who shall be member of Joint Tax Board.

1.3 STATEMENT OF PROBLEM

Valued Added Tax is a service industry like National Electric Power PLC (NEP PLC) Nigeria Port Plc. The complaints range failing by some few minister and government to embrace VAT fully, accept VAT invoice from the contractor and make reluctant remittance a many the tiers of government has generate some lively debate.

The burden of tax under VAT is regressive and business nuns additional cost of keeping VAT records and processing information required for the payment of tax and claiming returned from tax agent.