FG to raise N6tn from petroleum tax, VAT | Nairalaw

The Federal Government, through the Federal Inland Revenue
Service, plans to generate N4.3tn from petroleum profit tax and
N1.7tn through the Value Added Tax in 2019,

The amount is part of the N8.8tn tax revenue needed by the
government to finance the 2019 budget.

Details of how the revenue would be generated are contained in
the Medium Term Expenditure Framework Tax Revenue Projections for
2019-2021.

The document, which was submitted to the National Assembly by
the Executive Chairman of FIRS, Mr Tunde Fowler, was obtained on
Friday by our correspondent.

In the document, the FIRS said the N8.8tn would be realised
through two major tax revenue components. They are oil tax revenue,
where N4.3tn would be collected and non-oil tax revenue where the
service had proposed to generate N4.5tn for the government.

Further breakdown of the oil tax revenue showed that the entire
N4.3tn is expected to come from petroleum profit tax.

For the non oil tax revenue, an analysis of the document shows
that N1.7tn is expected to be earned from company income tax, while
gas income, capital gains tax and stamp duty are expected to earn
N685.63bn, N6.27bn and N17.64bn, respectively for the
government.

Also, Value Added Tax is expected to contribute N1.7tn;
education tax, N275.39bn; consolidated account, N99.78bn and
Nigeria Information Technology Development Fund, N20.01bn.

The FIRS in the document stated that the tax revenue target for
2019 was based on the Economic Recovery and Growth Plan of the
Federal Government.

It said that to boost tax revenue, a lot of initiatives would be
implemented with support from the government.

Some of them are the expansion of Tax Identification database to
cover federal, states and local government to establish a reliable
VAT tax base across the country.

While engaging relevant stakeholders, the service said it would
develop and propose tax laws targeted at emerging sectors of the
economy such as digital economies.

It said a review of existing tax laws to close the legal
loopholes for taxes by adopting a sectoral, rules-based approach
would be implemented.

The FIRS also stated that it would develop a strategy for
revenue campaigns targeted at the informal sector of the economy,
noting that a unified nationwide tax payer database would be
developed.

It said a strong incentive programme aimed at encouraging tax
payment by Nigerians would be designed.

The incentive, it noted, could involve tying government projects
to tax revenue collected.