Fed Govt mulls VAT increase

* Govt unveils revenue growth strategies

The Federal Government on Wednesday said Value Added Tax (VAT)
may have to be increased this year as a way of boosting non-oil
revenue to finance development projects.

The Minister of Finance, Mrs Zainab Ahmed, who spoke at the
unveiling government’s Strategic Revenue Growth Initiatives in
Abuja, said the initiative 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.”

She said: “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.

“There would be a VAT increase during 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.

“President Muhammadu Buhari has mandated the Federal Ministry of
Finance to generate more revenues to finance national development
and to proactively monitor collections by all Ministries
Departments and Agencies (MDAs) involved in revenue
generation.”

The minister said government “will also be looking at new
revenue streams and enhanced enforcement with regard 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.”

Other major revenue generating agencies also made presentations
on the initiatives they would introduce in their respective
agencies to increase revenue.

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

Fowler said 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 would also ensure that it collects tax on
properties owned by corporate entities in the country. This tax on
property he said, is not property tax but tax on corporate
gains.

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

In his presentation, the Comptroller-General, Nigeria Customs
Service, Col. Hameed Ali (rtd) said 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.

He also disclosed that the NCS will introduce new excise duties,
lamenting 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.”

Ali said “the country’s policy on exports to be reviewed, to
allow the Service charge duties on goods being exported out of the
country.”

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

As a way of blocking leakages, the AGF said his office would
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 the safety of public
resources.

The Permanent Secretary, Ministry of Finance, Mr Mohammed Dikwa
said the Ministry plans to review the tax incentive policy of the
country to ensure that the country was not losing interest
unnecessarily as well as review the targets and remittances of all
the revenue agencies under its supervision for effective
monitoring.

Dikwa also spoke about the plan of the government to harmonise
the Tax Identity Number (TIN) and the Bank Verification Number
(BVN) into one database.