FG Introduces New VAT Regime
The Federal Government has introduced the Strategic Revenue Growth Initiative to generate more revenues to finance national development.
The Minister of Finance, Mrs Zainab Ahmed at the official inauguration of the initiative in Abuja said that the aim was to harmonise efforts of all the revenue generating agencies in increasing government’s coffers.
Representatives of the Federal Inland Revenue Service, Nigeria Customs Service, Nigeria National Petroleum Corporation, Accountant-General of the Federation and Nigeria Sovereign Investment Authority were present at the launch.
Also present, were representatives of the Debt Management Office, Central Bank of Nigeria and the National Insurance Commission.
The major revenue generating agencies made presentations on the initiatives they would introduce in their respective agencies to increase revenue.
Ahmed said, “The initiative will be implemented in the areas of achieving sustainable revenue generation to optimally collect revenues to maintain fiscal buoyancy and resilience.
“We will also be looking at new revenue streams and enhanced enforcement with regards to revenue collection on our existing revenue streams. Through the initiative, we hope to achieve cohesion between revenue generating entities and equipping them with cutting-edge tools and expertise needed to support high performance.’’
Ahmed said that as a way of increasing non-oil revenue, the government was looking at the possibility of increasing Value Added Tax.
“We are studying a possibility of a VAT increase but you also know that the increase of VAT requires an amendment of a law.It is most likely the VAT increase will be selective. It will be on special items so it won’t be across the board.
“I am sure you are already aware that there are a number of items that are exempted from VAT such as food and drugs..There would be a VAT increase during the course of 2019, we will announce later the items and what the rate will be.
“We will have to take a request to the National Assembly for amendment of the VAT law before it takes effect,’’ she said.
The Chairman of FIRS, Mr Babatunde Fowler said that to increase tax revenue, the service plans to commence the drive to boost revenue by reviewing the present legal framework on tax.
He said that the Service plans to collaborate with Deposit Money Banks to get names of companies and individuals with funds in excess of N1 billion and ensure that appropriate tax was collected.
According to him, the Service will also link up with the Nigeria Customs to get data on companies that import goods into the country to ensure that they pay their fair share of tax.
In addition, he said that henceforth, the FIRS would ensure that it collects tax on properties owned by corporate entities in the country.
The Accountant-General of the Federation, Mr Ahmed Idris said his office would like to introduce the use of Treasury Single Account to all existing Nigerian embassies to enhance revenue.