FG set to increase VAT to 10 %

The Federal Government is set to increase Value Added Tax from its current level of five per cent on goods and services to 10 per cent.

This was disclosed on Friday in Lagos by Mr. Sunday Ogungbesan, Acting Chairman, Federal Inland Revenue Service (FIRS), while speaking with the media.

The FIRS boss was, however, not forthcoming on when the increase would take effect, saying “It is only the Federal Government that can announce when it will take off.”

According to him, increasing the VAT was one of the measures being considered by the Federal Government to shore up the revenue of the country that had suffered a slide since the slump in crude oil price started last year.

Nigeria earns about 80 per cent of its revenue from oil exports.

Ogungbesan, who did not say what the effect of the increased of VAT would be on the people said the legislature and other critical stakeholders had already been briefed and the machinery to implement the new policy as soon as the government gave the go ahead was already in place.

The FIRS boss frowned upon some state governments’ policies which impose sales tax on residents of such states, which he said amounted to duplication of taxes.

As he put it, “The FCT, for instance, just introduced hospitality tax. This is similar to the VAT that would be paid by the same set of people.

This means the people are going to pay double tax on the same service. We have to find a way of resolving this. We should have a  system that makes tax payment attractive to the populace.”

Ogungbesan, who said some states have as many as 60 levies, added that such multiplicity of taxes would not encourage investment.

Speaking in a similar vein, Registrar-General, Corporate Affairs Commission (CAC), Alhaji Bello Mahmud, has called on the Chartered Institute of Taxation of Nigeria (CITN) to address the lingering issue of double taxation in the country.

According to the News Agency of Nigeria (NAN), this is contained in a statement issued by the commission’s Director of Public Affairs, Mr Churchil Williams, on Friday in Abuja.

The statement quoted Mahmud as making the call when the Registrar/Chief Executive of CITN, Mr Adefisayo Awogbade, led a team of the institute on a courtesy visit to the commission.

The statement quoted Mahmud as stressing the need for tax harmonisation to ensure that people did not suffer double taxation.

According to the statement, Mahmud noted that double taxation discouraged payment of tax, among other negative effects on the nation’s economy.

He advised officials of the institute to work closely with the Federal Government, especially in promoting public awareness on government’s commitment, to use taxes for public good.

Mahmud noted that public enlightenment was important to enable tax payers to appreciate the benefits of tax payment.

He added that this would help eligible persons to appreciate the benefits of tax payment and positively change the perception of tax evaders, the statement quoted him as saying.

Thank you for reading this post, don't forget to subscribe!

LEAVE A REPLY

Please enter your comment!
Please enter your name here