FG targets N5 trillion in VAT in 2025
The Federal Inland Revenue Service has said that the Federal Government intends to levy a value-added tax of N5 trillion in 2024 while simultaneously implementing methods to eliminate identified tax loopholes.It further stated that the FG was prepared to comply with the Economic Community of West Africans’ decision on tax reform.
The Support Programme for Tax Transactions in West Africa, which receives funding from the European Union and ECOWAS, hosted a news conference in Abuja on Thursday where Zacch Adedeji, Chairman of the FIRS, made this statement.Mr. Matthew Osanekwe, an agency officer who represents the chairman, indicated that the VAT has been increasing since 2019. He provided numbers of N1.9 trillion, N1.5 trillion, N2.5 trillion, N2.3 trillion, and 3.6 trillion for 2019, 2020, 2021, 2022, and 2023, respectively.
He noted that the administration is following ECOWAS Article 30 on tax changes.Article 30 of the ECOWAS VAT Reform specifies that “each member state shall have the liberty to fix the VAT rate applicable to taxable operations within a bracket ranging from 5 to 20 0/0.” However, the Council of Ministers will establish the scope and rate of a reduced rate that member states may create.Earlier, the FIRS stated that the central government expected N19.41 trillion in income from the FIRS in 2024.
Efforts to broaden the scope of VAT collection include methods such as collecting taxes from non-resident resource suppliers like Google and Amazon, as well as using collection agents like deposit money banks and telecommunications firms.Additionally, the FIRS is cooperating with the United Nations Development Programme to train staff on VAT gap analysis in order to improve revenue collection efficiency.
Osanekwe emphasised continued efforts to move from the net profit technique to the whole consumption mode of tax collection, in accordance with Article 10.He stressed that with the adoption of these measures, the FIRS is on track to meet its VAT income objective of N5 trillion by 2024.
By Nnaemeka Odenigbo
