Abstract:

Value added tax was introduced by the Federal Government of Nigeria in 1993. VAT is a consumption tax levied on any consumption borne by the final consumer which is quite difficult for the consumers to evade. Many researchers have come up with the opinion that VAT been an irresistible payment has serves as tax burden on final consumers because it contribute to increase in inflation rate and also affects the purchasing power of consumers. Therefore the study intends to study the impact of Value Added Tax on consumers’ wellbeing. The study made use of primary and secondary source of data. The primary data involves the use of survey design in which about 50 questionnaire was administered. The population includes the final consumers that patronize retails stores such as Justrite and other supermarkets in Ota Ogun State and the purposive sampling technique was adopted in selection of sample size. The secondary data involves the review of literature and related articles. The method of analysis used in analysing the data obtained was linear regression analysis of Statistical Package for Social Science (SPSS). It was found out that increased in rate of Value added tax VAT from 5% to 10% suggested by the Federal Government sometimes early 2017 in order to increase revenue base of the country so as to ease the economic meltdown by ensuring that more revenue is available will be unfavourable to the Low Income Earners LIC. Therefore, the study recommended that the government should look into other means of increasing its revenue base such as implementation of presumptive tax and those loopholes impeding successful implementation of Value Added tax administration should be addressed by the Federal Government of Nigeria.