We have no plans to increase VAT by 50 percent, says FIRS
The Federal Inland Revenue Service (FIRS) has debunked rumours insinuating that the administrative agency is intending to increase the rate of value added tax (VAT) from 5 per cent to 50 per cent.
It was allegedly reported that the Chairman, Babatunde Fowler, had proposed that the Vat is increased by 50 per cent.
Fowler allegedly made the recommendation during a session with members of the senate finance committee at the 2019-2021 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) in Abuja on Tuesday
However, FIRS spokesperson, Wahab Gbadamosi, said that Fowler suggested an increase in VAT by the end of the year but not by 50 per cent.
The statement said the FIRS chairman was referring to an “increase in the number of individuals and business entities paying VAT.”
The statement reads:
“Fowler promised improved collection in CIT, Petroleum Profits Tax, (PPT) and VAT in 2019 relative to the collection performance of the Service in 2018.
“In 2018, the FIRS collected the sum of N1.1 trillion in VAT, N1.42 trillion in CIT and N2.4 trillion in PPT.”
Responding to the committee’s question on how the FIRS will meet its 2019 revenue generation target of N8 trillion relative to businesses in the tax net, Fowler was quoted as saying: “In terms of whether there should be an increase, I believe there should be an increase.
“One issue about taxation is that it should be fair to all. We have discovered after VAIDS (Voluntary Assets and Income Declaration Scheme) that a high percentage of businesses are collecting VAT and not remitting.
“We’ve also tried to address this issue. We’ve issued new VAT certificates. We have appealed to the public that if they are charged VAT and they are not sure it had been remitted, they should contact us. We even gave a small promotion that for every 25 names that they give to us, we give them a little gift either a power bank or something to show appreciation.
“But that aside, we are also on the streets. We have a team called FEETT (Federal Engagement and Enlightenment Tax Teams) going around to confirm that businesses are registered for VAT.
“I believe with the substitution of over 50,000 bank accounts that we just started this week, I am sure that those businesses that have been collecting VAT and not remitting the same or not remitting any tax payment are beginning to ensure that the level of tax compliance is improved.
“I believe that by the end of this year, government and Nigerian people should be ready for an increase in VAT.”