Buhari govt reveal timeframe for Nigeria’s 7.5 percent VAT actualization

The Buhari government has restated that there was no going back in the increment of Nigeria’s Value Added Tax (VAT).

Mrs Zainab Ahmed, Nigeria’s Minister of Finance, Budget and National Planning, made the declaration on Thursday.

FAZENOTETV reports that she spoke at the IMF Governor Talks session at the 2019 Annual Meetings in Washington DC, United States.

According to her, 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.

Ahmed, in her speech, said: “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.

“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”.

“There will be increment in excise duty on some products like carbonated goods. However, we will not tax some categories such as food items, healthcare items, educational items, gas-based industries”.

The minister had on Monday, announced that Nigeria has not been able to reach 80 per cent revenue performance for 2019.

Ahmed at the public presentation of the 2020 budget proposals, 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.

Ahmed said 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”, she added