Tax on luxury items, corporate gains coming

VALUE Added Tax on luxury items and corporate gains tax are to be introduced this year to widen revenue sources, the Federal Government has said.

The government yesterday unveiled its Strategic Revenue Growth Initiatives aimed at generating more revenues to finance programmes.

Finance Minister Mrs. Zainab Ahmed, who launched the initiatives in Abuja, said the aim of the revenue growth initiatives was “to harmonise efforts of all the revenue generating agencies towards boosting accruals into government’s coffers and to sustain revenue generation in all sectors and maintain fiscal buoyancy and resilience.”

According to the minister, her ministry has a presidential mandate to generate more revenues to fund national development and to proactively monitor collections by all Ministries Departments and Agencies (MDAs) involved in revenue generation.

After her remarks, all major revenue agenerating agencies made presentations on how they plan to increase earnings.

Mrs. Ahmed said: “The government will also be looking at new revenue streams and enhanced enforcement with regards to revenue collection from 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.”

As a way of increasing non-oil revenue, the finance minister said the government was looking at the possibility of increasing VAT.

“We are studying a possibility of a VAT increase but you also know that the increase of VAT requires an amendment of the 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.

“There would be a VAT increase in the course of 2019; we will announce later the items and what the rate would be. We would have to take a request to the National Assembly for amendment before it takes effect.”

In his revenue-generating proposal, the Chairman, Federal Inland Revenue Service (FIRS), Babatunde Fowler, said the service plans to boost revenue by reviewing the current legal framework on tax.

Fowler reiterated that the FIRS will go ahead to collaborate with Deposit Money Banks (DMBs) “to get names of companies and individuals with funds in excess of N1 billion and make sure that appropriate tax is collected.”

“The FIRS”, he said, “will also ensure that it collects tax on properties owned by corporate entities in the country. This tax on property is not property tax but a tax on corporate gains.”

He added that the FIRS will also link up with the Nigeria Customs Service (NCS) to collate the data on companies that import goods into the country, to ensure that they pay their fair share of tax.

In his presentation, the NCS Comptroller-General Col. Hameed Ali (rtd) said that the Service will focus on reducing smuggling, block mis-invoicing and illicit financial flow of goods as well as acquire non-intrusive scanners to be deployed to all ports.

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He also disclosed that the Service will introduce new excise duties, even as he lamented that “at the moment, the country only collects excise duty on alcohol and cigarettes. The Service would also like to look into, including carbonated drinks since they also have health implications for consumers.”

Col. Ali appealed that the Service will want “the country’s policy on exports to be reviewed, to allow it charge duties on goods being exported out of the country.”

On his part, the Accountant-General of the Federation (AGF), Ahmed Idris said his office would like to introduce the use of Treasury Single Account (TSA) to all existing Nigerian embassies to enhance revenue.

He said: “As a way of blocking leakages, Office of the AGF will also link revenue generating agencies to the government Integrated Financial Management Information System (GIFMIS) to enable the Federal Government process financial transactions faster and also reduce opportunities for corruption and ensure safety of public resources.”

The Permanent Secretary, Ministry of Finance, Mohammed Dikwa said the ministry plans to review the tax incentive policy to minimise losses and also review the targets and remittances of all the revenue agencies under its supervision for effective monitoring.

Dikwa also spoke of the plan to roll the Tax Identity Number (TIN) and the Bank Verification Number into one