The desire of every patriotic citizen of Nigeria is to have a sound and buoyant economy. One way of demonstrating such a desire is through the prompt payment of taxes to the government.  One of the means by which government increases its internally generated revenueis Value Added Tax (VAT). This is a tax on the supply of goods and services whichis eventually borne by the final consumer, but collected at each stage of theproduction and distribution chain. VAT as a concept was first introduced by Francein 1954, and has over time been embraced by well over 70 countries. It has inrecent time become a major source of revenue in many developing countries,including the sub-Saharan African countries. Shalizi and Squire (1989) found thatVAT accounted for about 30 percent of total tax revenue in Ivory Coast, Kenya andSenegal in 1982. Bogetic and Hasan (1993) found that Indonesia introduced VATin 1983, and by 1988, the ratio of VAT revenue to GDP had risen to 4.5 percent. This impressive record in virtually all countries where it was introduced clearlyinfluenced the decision to introduce VAT in Nigeria in January 1994 as areplacement for the existing sales tax. It was imposed on all goods manufactured inNigeria, as well as on the goods that were imported and sold domestically. TheFederal Inland Revenue Service (FIRS), the agency in charge of tax administrationin Nigeria, pointed out that VAT is a consumption tax that is relatively easy toadminister and difficult to evade, and has been embraced by many countries(FIRS, 1993a; 1993b; 1993c). In this context, it becomes necessary to empiricallyexamine the likely macroeconomic impact of VAT administration. Evidence so far supports the view that VAT is already a significant source ofrevenue in Nigeria. For instance, VAT revenue in the year of its inception (1994)was N8.194 billion, which was 36.5 percent greater than the projected N6 billion forthat year (Ajakaiye, 1999). However, the members of the organised private sectorhave been voicing their reservations in the sense that VAT is taking a toll on theprices of their products. From an economic point of view, one expects the price ofgoods subject to VAT to rise, however, beyond this expected rise, businesses aretaking advantage of the existence of VAT to increase prices of goods and servicesarbitrarily. According to Aruwa (2008), the resulting price increase has led to higherinflation. This may have prompted Mclure (1989) to state that policy makers shouldbe concerned about the macroeconomic impact of VAT, especially on prices,output, income and consumption, before considering its adoption. A few empirical works on the subject exist in the context of the Nigerian economy. Ajakaiye (1999) undertook the most detailed study for Nigeria, including anextensive investigation of the impact of VAT on key sectoral macroeconomicaggregates, by using a Computable General Equilibrium (CGE) model of theNigerian economy. Unfortunately, the study was carried out when VAT was only sixyears old in Nigeria, too early to get reliable conclusions on its impact on othermacroeconomic aggregates. Besides, from 1999 to date, the economicenvironment in Nigeria has undergone a number of changes. For instance, therewas a transition from a military to a democratic regime. project topics   final year project topics and research materials 

1.2 STATEMENT OF THE PROBLEM In terms of contributions the total federal collection revenue, VAT revenue at the time of inception in 1994 was anticipated to be much larger, indicating that Nigeria then may soon join the growing list of developing countries here VAT contributes at least 20% of total government revenue . While the performance of VAT as a source of revenue in sub-Sahara Africa and Nigeria in particular is clearly encouraging, it remains difficult to find attempts to systematically asses the impact of VAT on these economies (Ajakaiye, 1999). Nevertheless, include (1989) opines policy makers considering the adoption of VAT should be interested in the macroeconomic impact, especially on price, output, income and consumption. Economically, one expect the price of VAT able goods to rise, however beyond this expected rise, business are taking advantage of the existence of VAT the increas4e price of goods and services arbitrarily. 13 The excessive price increase according to Aruwa (2008) has further led to higher inflation in Nigeria. Given the foregoing seeks to asses the macroeconomic impact at VAT on price level in Nigeria.

1.3 AIMS AND OBJECTIVES OF STUDY The main aims and objective of the research work is to examine the effect of value added tax (VAT) on price stability in the Nigeria economy. Other specific objectives of the study include:

To examine the effect price fluctuation on the economy  of Nigeria To investigate on the roles of value added tax (VAT) in revenue generation for the federal government of Nigeria To investigate on the factors affecting the implementation of VAT in Nigeria To examine the effect of VAT on the consumer price index To proffer solution to the above stated problem.


How does price fluctuation affect the economy  of Nigeria? What roles do value added tax (VAT) play in revenue generation for the federal government of Nigeria? What are the factors affecting the implementation of VAT in Nigeria? What effect does VAT have on consumer price index?

1.5 RESEARCH HYPOTHESIS Hypothesis 1 H0: the implementation of VAT has no significant effect on price stability H1: the implementation of VAT has significant effect on price stabilityHypothesis 2 H0: there is no significant relationship between the implementation of value added tax and economic growth in Nigeria H1: there is no significant relationship between the implementation of value added tax and economic growth in Nigeria

1.6 SIGNIFICANCE OF THE STUDY Finding from the study will be of immense benefit to policy makers in assessing the performance of VAT on the stability of price level in Nigeria. Secondly, it will serves as a reservoir of knowledge for further studies.

1.7 SCOPE AND LIMITATION OF THE STUDY The study intends to focus on the Nigeria economy with the period 1994 to 2015. The choice of range of period is informed by the fact that VAT policy implementation in Nigeria began by 1994. Quarterly data will be employed to extend the sample size, but where this is not available; we will have no choice than to use annual data for the study.

1.8 LIMITATION OF THE STUDYFinancial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.1.9 DEFINITION OF TERMSVAT: This is an Indirect tax on the domestic consumption of goods and services, except those that are zero-rated (such as food and essential drugs) or are otherwise exempt (such as exports). Price Stability: This implies avoiding both prolonged inflation and deflation


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How To Write Chapter Three Of Your Research Project (Research Methodology)

  • Methodology In Research Paper

    Chapter three of the research project or the research methodology is another significant part of the research project writing. In developing the chapter three of the research project, you state the purpose of research, research method you wish to adopt, the instruments to be used, where you will collect your data, types of data collection, and how you collected it.

    This chapter explains the different methods to be used in the research project. Here you mention the procedures and strategies you will employ in the study such as research design, study design in research, research area (area of the study), the population of the study, etc. You also tell the reader your research design methods, why you chose a particular method, method of analysis, how you planned to analyze your data.

    Your methodology should be written in a simple language such that other researchers can follow the method and arrive at the same conclusion or findings.

    You can choose a survey design when you want to survey a particular location or behavior by administering instruments such as structured questionnaires, interviews, or experimental; if you intend manipulating some variables.

    The purpose of chapter three (research methodology) is to give an experienced investigator enough information to replicate the study. Some supervisors do not understand this and require students to write what is in effect, a textbook.

    A research design is used to structure the research and to show how all of the major parts of the research project, including the sample, measures, and methods of assignment, work together to address the central research questions in the study. The chapter three should begin with a paragraph reiterating the purpose of research. It is very important that before choosing design methods try and ask yourself the following questions: Will I generate enough information that will help me to solve the research problem by adopting this method?

    Method vs Methodology

    I think the most appropriate in methods versus methodology is to think in terms of their inter-connectedness and relationship between both. You should not beging thinking so much about research methods without thinking of developing a research methodology.

    Metodologia or methodology is the consideration of your research objectives and the most effective method and approach to meet those objectives. That is to say that methodology in research paper is the first step in planning a research project work.

    Design Methodology: Methodological Approach

    Example of methodology in research paper, you are attempting to identify the influence of personality on a road accident, you may wish to look at different personality types, you may also look at accident records from the FRSC, you may also wish to look at the personality of drivers that are accident victims, once you adopt this method, you are already doing a survey, and that becomes your metodologia or methodology.

    Your methodology should aim to provide you with the information to allow you to come to some conclusions about the personalities that are susceptible to a road accident or those personality types that are likely to have a road accident.

    The following subjects may or may not be in the order required by a particular institution of higher education, but all of the subjects constitute a defensible in metodologia or methodology chapter.

    Click here to complete this article - How To Write Chapter Three Of Your Research Project (Research Methodology)


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