DAILY FILE – The Federal Inland Revenue Service (FIRS) has urged Nigerians to brace up for an increase in the value added tax.
Specifically, the FIRS said federal government would raise Value Added Tax (VAT) to between 35 and 50 per cent in order to finance the payment of the N30,000 minimum wage.
The government further disclosed that it was disposed to exploring other options outside borrowing to pay the much touted minimum wage. Both the minister of budget and national planning, Senator Udo Udoma, and the chairman of the Federal Inland Revenue Service, Mr. Babatunde Fowler, gave this indication when they appeared before the Senate Committee on Finance to discuss the Medium Term Expenditure Framework (MTEF).
The duo were in the Senate to explain details of the 2019-2021 Medium-Term Expenditure Framework and Fiscal Strategy Paper, which is expected to be the benchmark for the 2019 budget deliberations.
Speaking the mind of the federal government, the FIRS chairman, Fowler, said that government was considering an upward review of VAT to between 35 per cent and 50 per cent, which amounts to 6.75 per cent and 7.25 per cent.
Fowler, who said the FIRS’ goal was to achieve an N8trn revenue generation target this year, also stated that the 50 per cent increment would affect the Company Income Tax and the Petroleum Profit Tax. ‘’By the end of this year, we should be ready for increase in VAT. A lot of Nigerians travel to Ghana and other West African countries and they can see that theirs is much higher, and they pay when they go for those trips. We should be ready for an increase on VAT. ‘’I can certainly see an increase in VAT of at least 35 per cent to 50 per cent this year based on our enforcement activities. There certainly will be an increase in Company Income Tax (CIT) and also on Petroleum Profit Tax (PPT)’’.
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