The Nation Newspaper

Tag: Value Added Tax (VAT)

  • FIRS rakes in N3.3tr tax revenue in 2016        

    FIRS rakes in N3.3tr tax revenue in 2016        

    The Federal Inland Revenue Service (FIRS) realized N3.30 trillion tax revenue for the nation’s coffers.

    Executive Chairman of the FIRS Mr. Tunde Fowler made this closure in Abuja Monday at training for journalists on tax reporting.

    Fowler praised the efforts of the Service for raising over N3.3 trillion at a most trying period in the country’s economic history.

    Fowler stated that the FIRS performed the feat of “a N3.303 trillion collection in a challenged economy– in a year when oil prices dropped less than $50 dollars a barrel for over nine months and when the value of stocks on the Nigerian Stock Exchange (NSE) slid and purchasing power was slim. The average oil price was about $100 dollars per barrel between 2012 and 2015.”

    To do this, the Service he said implemented “waiver of Interest and penalty as part of the efforts of the Service to promote voluntary compliance and shield taxpayers from the burden of carrying forward tax liabilities that rose from penalty and interest.”

    FIRS he said “successfully implemented a waiver of interest and penalty for three years (2013 to 2015). The Service, by this entirely new idea has so far realized N27 billion.”

    The FIRS boss also disclosed that by expanding the tax next with a massive nationwide registration exercise of new tax payers, “the result is the registration of 814,000 additional taxpayers by December 2016 by FIRS and 3.4 million taxpayers by State Internal Revenue Services (SIRSs). By December last year, Nigeria has a National Tax Roll of 14 million.”

    The federal tax revenue collector also attributed last year’s tax revenue realization to the ease of tax payment.

    According to Fowler, “Considering convenience, proximity and ease of tax payment, the asked taxpayers to file their tax returns at the FIRS offices nearest to them. This novel idea has increased compliance as it eased the burden of taxpayers who have had to travel from far places to pay their taxes.”

    Another reason for the 2016 tax performance Fowler said was the “improved collaboration with the office of the Accountant-General of the Federation to ensure that MDAs remit taxes such as Withholding Tax (WHT) Value Added Tax (VAT) promptly through the Government Integrated Financial Management Information System (GIFMIS).”

    GIFMIS is an IT based system for budget management and accounting used to improve Public Expenditure Management processes, enhance greater accountability and transparency across Ministries and Agencies.

    Other factors that aided the FIRS in raising the impressive N3.3 trillion tax revenue Fowler said included collaboration with the Joint Tax Board and State of Internal Revenue Services on several fronts such as Taxpayer Enlightenment, Tax Enforcement and registration of new taxpayers; Tax Education, Enlightenment and Media Campaigns; Inter-agency Collaboration, through collaborative handshake with other government agencies such as the Nigeria Customs Service, Federal Road Safety Commission, (FRSC), the Immigration Service and the Corporate Affairs Commission is being strengthened.”

    Integrated Stamp Duties Services (ISDS) portal for ease of tax payment “was introduced by the Service for a purpose-built Stamp Duty portal that facilitates the online assessment and payment of Stamp Duties by Nigerian taxpayers. A Stamp Duties Co-ordination was created as part of the standard FIRS structure, while Commissioners of Stamp Duties were appointed” Fowler said.

    The FIRS, Fowler said “is convinced that with progressive application of technology, persuasion and enforcement on recalcitrant taxpayers, and partnership with key stakeholders like the press, we will collect enough revenue for the nation in 2017.”

    One of the facilitators, Mr. Mark Abani used the opportunity to reiterate that it is illegal for state and local governments to mount road block on the highway for the purposes of collecting tax from travelers.

    He enjoined members of the public to stand up for their rights and resist such illegality by refusing to make such payments and seek legal redress in court.

     

  • Kwara explains delay of February pension payment

    The Kwara Government on Thursday said late receipt of elements of federal allocation was responsible for the delay in payment of pension in February.

    The state Commissioner for Finance, Alhaji Ademola Banu, gave the reason in a statement made available to the News Agency of Nigeria (NAN) in Ilorin.

    He explained that FAAC elements such as statutory allocation, Value Added Tax (VAT) and exchange gain difference had, however, been received.

    Banu said the state government still awaited the receipt of excess Petroleum Profit Tax (PPT), which stood at N332.05 million.

    He, however, disclosed that the pensioners and staff of ministries, departments and agencies had started receiving their payment on Wednesday.

    The commissioner further noted that due to the financial arrangements of the Federal Government, elements of monthly allocations were received at separate intervals.

    According to him, the installment receipt is sometimes responsible for the delay in payment of salaries, pensions, overhead and subventions to Ministries, Departments and Agencies (MDAs) in the state.

    He commended the retirees and affected workers for their patience and assured that the government would always strive to ensure prompt payment of monthly entitlements.

     

  • NLC says no to VAT increase plan

    NLC says no to VAT increase plan

    The Nigeria Labour Congress (NLC) is objecting to any plan by government to increase the Value Added Tax (VAT).

    The NLC declared Friday that any such move would further impoverish Nigerians.

    It said that instead of increasing VAT and thereby placing more burden on the people, government  should go after all individual tax dodgers and  multinationals that are in the habit of not paying tax, but prefer to negotiate what they want to pay.

    The NLC position was made by its President; Mr. Ayuba Wabba represented by the Head of Information, Comrade Benson Ukpah at the presentation of a book entitled “Developmental Unionism” in Abuja.

    Wabba also lamented the current division within the rank of organised labour in the country saying it is weakening the bargaining power of the Nigerian worker to the advantage of employers and government.

    Wabba said it was unfortunate that while capital is consolidating, leading to some transnational corporations far richer and far stronger than government, unions are fragmenting and doing the exact opposite.

    He said: “If you look at the social partners, whereas the government has power and resources and employers have resources, unions do not have the material resources the two other social partners have except their labour as well as strength in their unity and this should not be discountenanced.”

    He said the working class people in the country are more hit by the current economic challenges in the country because “our economy is going through challenges that are unprecedented.”

    “In fact, not even the unfortunate civil war created this kind of situation for Nigerians. When we have challenges in the economy, they directly translate into the working and living conditions of workers.

    “Thischallenges also directly affect our unions. When salaries and pensions are not regularly paid, they transmit poverty and suffering to our homes.

    “When inflation rises without commensurate rise in pay, this reduces the capacity and purchasing power of the worker and reduces the quality of food and standard of living of the worker. The present economic challenges are directly felt more by workers than any other member of the Nigerian community.
    “The other challenge we face in the world of work at the moment is that while  capital is consolidating, leading to a situation where we have transnational corporations far richer and far stronger than national government, unions are fragmenting and doing the exact opposite. So, this further weakens the bargaining power of unions because strength lies in unity.

    “The other challenge we have is that while capital is able to move, Labour is not allowed to move. Each time there is a project of Foreign Direct Investment, the government welcomes them with open hands.

    “Whenever some of our political leaders take our money and take it outside the country, nobody questions them. The billions of naira that has been taken out of this country was done with the aid of foreign collaborators.

    He stressed the need for every Nigerian to join in fighting corruption.

    “Corruption has eaten into the fabrics of this country and we must fight it and restore the integrity and honour of this country so that our children can stay back here and not be treated like dogs in South Africa.

    Author of the book, Comrade David Kayode Ehindero called for a united labour movement in the country, while government and corporate organisations should entrench welfarist policies in their day to day activities.

    Ehindero who is the Chairman of the Kwajalein state chapter Agricultural and Allied Employees Union of Nigeria said there was the need for organised labour to come together in the spirit of patriotism and value placement to achieve a realistic development and advancement.

  • FEC approves revised National Tax Policy to check low taxation

    FEC approves revised National Tax Policy to check low taxation

    The Federal Executive Council on Wednesday in Abuja approved a revised National Tax Policy to address low taxation in the country.

    The Minister of Finance, Mrs Kemi Adeosun made this known at a joint press briefing with the Minister of Information and Culture and Minister of State for Aviation Hadi Sirika after the Federal Executive Council meeting.

    The meeting was chaired by Acting President Yemi Osinbajo.

    Nigeria’s tax contribution to the Gross Domestic Product (GDP) is said to be the lowest in the world with about six per cent.

    Its Value added Tax is also said to be the lowest in the world at five per cent.

    The minister, however, said under the new tax policy, consumers of luxury goods would pay a higher Value Added Tax (VAT).

    According to her, the new VAT per centage for the luxury items is still subject to approval of the National Assembly.

    She expressed the hope that the new revised tax policy, which was recommended by the ministry’s National Policy Tax Review Committee in August 2016, would entrench an efficient tax system.

    This according to her, will also address the low level of tax contribution to the Gross Domestic Product (GDP).

    “What the committee has shown is that we should look at actually increasing VAT on some luxury items.

    “ VAT of five percent, we have lowest VAT and whilst we don’t think VAT should be increased on basic items, if you are going to drink champagne you drink Champagne in the UK and VAT is 20 per cent why should it be five per cent in Nigeria.

    “So, they have made recommendations that we should pull out some luxury items and increase VAT on those items immediately.

    “And I think that is a very valid and sensible suggestion which we are going to talk to the National Assembly to see how we can implement it.

    “But as far as basic goods are concerned, I believe it is only fair that when you consume luxury goods you should pay a little bit more.

    “The National Assembly will decide the percentage,’’ she said.

    She said the approved tax policy would be jointly implemented by the federal, state and local governments, adding that other agencies of government like the Federal Inland Revenue Service (FIRS), the media, Civil Society Organisations and others would be involved in the implementation.

    According to the minister, the main thrust of the tax policy is to establish fundamental principles to guide and orderly develop the Nigerian tax system toward meeting its objectives.

    It also recognises the primacy of the taxpayers and clearly states their rights and duties.

    It equally reinforces the role of the ministry of finance in the formulation, coordination and implementation of tax policy on an ongoing basis.

    The policy is expected to guide the operation and review of the tax system and provide the basis for future tax legislation and administration.

     

  • RMAFC calls for upward review of VAT to 7.5%

    • FG identifies 1,000 dormant revenue lines
    The Revenue Mobilization Allocation and Fiscal Commission (RMAFC) has called on the federal government to review Value Added Tax (VAT) upward from five per cent to about 7.5 per cent in order to improve the country’s revenue base.
    The Chairman, RMAFC, Mr Shettima Gana said this in Kano yesterday at a two-day National Revenue Retreat organized by the federal ministry of finance.
    Gana said VAT was a high tax revenue yielding instrument that could be used to shore-up revenue required for financing the ever-expanding public expenditure needs of all tiers of government.
    He then advocated for a comprehensive research to be initiated to collate data from the Corporate Affairs Commission, banks, state ministries of trade and so on, to determine and capture all possible VAT targets.
    Gana advised Government to introduce additional taxes, such as toll tax for the road, luxury goods tax on mansions, exotic cars, private jets and jewelries. He also canvassed for inheritance tax to be introduced which will be paid by a person who inherits money or property from a person who has died. Gana also harped on the importance of developing the agriculture, mining and tourism sector, which holds the potential for huge revenue stream for the government.
    He urged government to enhance collection efficiency, block leakages in revenue collection and beef up revenue monitoring and intelligence gathering. He said once all this is done, it would bring in more funds for government, expand the economy and create employment and ensure economic development.
    Earlier, the minister of finance Mrs Kemi Adeosun assured Nigerians that the Federal Government’s drive for enhanced revenue generation would not be a burden to Nigerians but will ensure that all revenue due to the government, irrespective of the source, is collected with a high degree of efficiency, fully receipted and properly accounted for.
    Adeosun, said the federal government has identified over 1000 dormant revenue lines, and assured Nigerians that such huge dormant revenue opportunities will be maximised.
    She disclosed that the Federal Government has commenced the review and revision of the cost profiles of revenue generating agencies to ensure that maximum operating surpluses are declared and remitted in compliance with the Fiscal Responsibility Act. She said, “In this regard, we have recently commenced a number of audits of a range of agencies that will give us improved visibility into the revenue and cost profiles. This will enable us to generate an indicative cost profile that can be used to establish reasonable budget targets going forward.”
    Adeosun said the days when revenue generating agencies acted as autonomous entities outside of the budget cannot be allowed to continue, saying whether the funds are from fees and fines, from taxes or from projects, the law is clear that every naira must be paid into the Consolidated Revenue Fund.
    She added that the Ministry of Finance has committed itself “to a Total Revenue focus, which will reengineer revenue collection, explaining that the  focus of the event will be around preparing for the enhanced government revenue opportunities that will arise as Nigeria begins to recover.”