We are not going back on 7.5 percent VAT increment-FG

By Bimbo Ogunnaike

The Federal Government has vowed that that there was no going back in the increment of Nigeria’s Value Added Tax (VAT)

Minister of Finance, Budget and National Planning, Zainab Ahmed, made the disclosure during the International Monetary Funds (IMF) Governor Talks session at the 2019 Annual Meetings in Washington DC, United States on Thursday.

According to Ahmed, the 2020 Appropriation Bill sent to the National Assembly was based on the proposed 7.5 percent and would take effect once the budget is passed.

“We are lagging behind in revenue mobilisation. We have low tax rates, our tax laws are archaic, low tax morals. We have to evolve in doing business and block revenue leakages. Nigeria is now set to do things differently; we are set to take some bold tax initiatives,” the minister said.

“We are improving our tax laws. The Finance Bill before the legislature will improve fiscal laws, tax incentives, support SMEs, and ease of doing business. We are increasing our VAT rate from 5 percent to 7.5 percent. The proposed 2020 budget is based on this. The increment will be used to fund health, education and infrastructure development,” she added.

It would be recalled that Ahmed had on Monday disclosed that Nigeria found it so difficult to reach 80 per cent revenue performance for this year

During the public presentation of the 2020 budget proposals, the minister  said that as at half year, the actual aggregate revenue for 2019 was N2.04 trillion, which was 58 per cent of the prorate target.

She added  of the figure, oil revenue accounted for N900 billion, Company Income Tax (CIT) N349.11 billion, Value Added Tax (VAT) N81.36 billion and Customs Collections N184.10 billion.

“As to whether we will reach the N8.33 trillion at the end of 2019 is very unlikely and that is why we have to make special efforts to boost revenue performance.

“It is clear that we can not reach even 80 per cent and that is why we have to do several things to make sure that revenue performance is enhanced”, the minister explained.