Value Added Tax (VAT) : The Perfect Solution to the Taxation of Consumption

This paper seeks to provide reasons for the global acceptance of the Value Added Tax (VAT) as the preferred choice of consumption tax. For this purpose, it was necessary to, first, give a brief background on consumption taxes; second, to explain the concept of VAT and RST and provide the limitations of an RST; third, to identify the reasons for the superiority of VAT together with country experiences of Nigeria, Gambia and Mauritania; and finally, conclude that VAT is widely favored as a perfect solution to the taxation of consumption due to its neutrality, administrative ease and simplicity, and its revenue raising capacity. However, this largely dependent upon the design of the VAT and a strong administrative institution for its proper implementation