Abstract: As a result of the uncommon nature of VAT system, majority of the populace in the country are unaware of its existence, consequently, the low credibility of government makes people scorn the payment and collection of VAT. The purpose of this study is to review the effectiveness of the administration of VAT as it relates to how it can improve government revenue and through more light on it’s contribution to the economic growth of Nigeria. In addition to the preliminary interviews was a review of study relating to the problems of administration and collection machinery of VAT. Simple percentages and chi-square (χ²) were used for data analysis. There is need to embark on business enumeration in each state with a view to having data base on business. Seminars and workshops so far organized on this issue are narrow its scope and design. There should be functional VAT offices in every council area to coordinate a vigorous campaign to educate people and seek their cooperation. This will no doubt erode the negative attitude that some of the consumers have developed towards VAT. The government should adequately make provision for retrieving the proceeds of VAT from companies and other agents of collection.