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The Effect Of Value Added Tax On E-Commerce In An Ecomony

Authors:

OKORO MARCELLINUS IYKE, OGBONNA HAPPINESS IJEOMA

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Book details

ISBN: 979-8851846649

Book publisher: Independently published (July 11, 2023)

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Book Summary: The dynamism of the business environment and the rapid technological revolution of the 21st Century has reshaped the model of business practices in recent times. The evolving dimension of business practices that have arisen as a result of the spread of these developments include the e-transaction model which has brought about a number of benefits in terms of enhanced business opportunities and growth, employment, as well as increased general societal well-being due to access to a diverse range of goods and services. This is so because the evolution of technology and the resulting possibilities of e-transactions has significantly increased the capability of businesses to source factor inputs from suppliers, acquire information and undertake transactions with private and institutional consumers around the world without having to be physically present them in the same geographical location. E-commerce make it easy for people to make purchases of essentials products such as drugs, books, medical, educational and entertainment services; in fact, e-commerce has increases both the consumption and investment choices. In any economic arrangement there are winners and losers, e-commerce may have negative effect on some individuals, business, and economies particularly in Sub- Saharan countries, who import virtually everything they uses and export raw materials. Expansion of e-commerce in Sub Saharan African countries like Nigeria, without taking proper measures may increase pressure on the value of domestic currency, create unemployment, erode domestic consumption base, and may lead to fall of revenue from Value Added Tax and Import Duties. Therefore, this study examined the effect of value added tax on E-Commerce in an economy with reference to selected micro and small enterprises in Ikeja L.G.A, Lagos State. The study objectives are as follows: To ascertain the challenges of implementing VAT on e-transactions in Nigeria; To evaluate the effect of VAT implementation on e-transactions in an economy; To determine the effect brought by VAT buoyancy on e-transactions in an economy as well as to establish the effect of VAT elasticity on e-transactions in an economy. To achieve these objectives, the research provided answers to the following research questions: What are the challenges of implementing VAT on e-transactions in an economy? What is the effect of VAT implementation on e-transactions in an economy? How does the VAT buoyancy affect e-transactions in an economy? What is the effect of VAT elasticity on e-transactions in an economy? To answer the stated research questions and achieve the objective of the research, the following hypotheses were tested: H1: VAT implementation has no significant effect on e-transactions in an economy. H2: Value Added Tax buoyancy has no significant effect e-transactions in an economy. H3: Value Added Tax elasticity has no significant effect e-transactions in an economy. Literatures on the various concepts relating to the variables of the study were reviewed. The theories that underpinned the study were: The relative income hypothesis by James Duesenberry (1949), The theory of collection efficiency by Aizeman and Yothin (2005) and the technology acceptance model (TAM) by Davis and Warshaw (1977). Descriptive survey research design was employed in the study. The population of the study consist of MSEs in Ikeja local Government Area, Lagos State. The research instrument used was questionnaire and it was structured into Two (2) sections namely section A and B. Section A contained items on demographic characteristics of respondents Section B contained the main questions directed to selected MSEs owners and staff in Ikeja, Lagos, on their opinions on effect of value added tax on E-Commerce in Nigeria. Simple percentages and frequency tables were used to analyse the responses from respondents while the stated hypotheses were tested using ordinary least square method of regression analysis.