1.1 BACKGROUND OF THE STUDY
A tax is a compulsory levy imposed by the government on individual and business firm such levies are for example made on income (consisting of salaries, capital transfer, business profit) etc.
Taxation in Nigeria has been in existence even before the coming of the British colonial masters, but they were informing of tributes to or labour for community work.
Lugard established the European form of taxation in 1904; this was followed by nature revenue ordinance of 1914, while the first tax legislation on adult was enacted in 1939, which began in 1940.
Value added tax is a tax on consumption which is borne by the final consumer because it include in the price paid of goods and services presently, it has a rate of five percent (5%) of Consumption and thus the federal inland Revenue service in vested with this power to collect it.
The new Webster’s dictionary of the English language international edition defined tax as “a charge on a person’s income or property”, direct tax or on the price of good sold, indirect tax made by a government to collect revenue. From the above, tax could be seen as a compulsory levy imposed by the government through its agents on citizen, consumption capital expenditures and income for the purpose of generating revenue for governmental use.
Taxation is the concept and science of imposing tax on citizens consumption etc. value added tax is a tax imposed by the government on citizens on the consumption of goods and services by the citizens.