FG To Increase VAT From 5% To 50%
LAGOS MARCH 20TH (NEWSRANGERS)-The Federal Government on Tuesday revealed its plan to increase the Value Added Tax (VAT) up to 50 percent.
This is even as the upper chamber of the National Assembly approved N30, 000 as new minimum wage.
The planned upward review of the Value Added Tax up to 50 percent was disclosed by the Minister of Budget and National Planning, Senator Udo Udoma, and the Chairman of the Federal Inland Revenue Service, Babatunde Fowler, in Abuja when they appeared before the Senate Committee on Finance.
The duo, who was in the Senate to explain details of the 2019-2021 Medium-Term Expenditure Framework and Fiscal Strategy Paper expected to be the benchmark for the 2019 budget deliberations, added that the increment in VAT would enable the Federal Government fund the new national minimum wage.
Fowler further explained that the proposed payable VAT by Nigerians, based on the increment, would actually be between 35 percent (6.75%) and 50 percent (7.25%).
The government is currently charging five percent VAT on all products in the country.
Fowler said the FIRS’s goal was to achieve an N8 trillion revenue generation target this year.
He said: “By the end of this year, we should be ready for an increase in the VAT.
“A lot of Nigerians travel to Ghana and other West African countries and they can see that theirs is much higher.
“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 percent to 50 percent this year, based on our enforcement activities.
Reviewing the performance of the 2018 budget, the Director General of the Budget Office, Ben Akabueze, said the budget had achieved appreciable performance.
Meanwhile, the Senate on Tuesday concurred with the House of Representatives on the passage of the N30,000 new Minimum Wage for workers in the country as against the N27,000 recommended by the executive in a Bill forwarded to that effect in January this year.
The Senate has also called for immediate review of the present revenue sharing formula among the federal, state, and local governments for effective implementation of the new Minimum Wage at the state and local government levels.
The revenue sharing formula, as it is presently, gives the Federal Government 56% of whatever money to be shared from the consolidated revenue fund on monthly basis, while the 36 states take 24% and the remaining 20% is shared by the 774 local government councils.
The Senate, in passing the bill, also called on the executive to forward to the National Assembly supplementary budget on personnel cost component of the 2019 budget for implementation of the approved N30, 000 new Minimum Wage.
Approving the new Minimum Wage, the lawmakers had appealed to the Federal Government not to allow the workers go on strike before implementation.
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Posted by News Rangers
on Mar 20 2019. Filed under National.
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