Tax compliance to be extended to private sector
Ndubuisi Francis in Abuja
Value Added Tax (VAT) contributed a gross revenue of N797.51 billion to the Federation Account between January and October 2017, the Minister of Finance, Mrs. Kemi Adeosun, has revealed.
Non-oil revenue represents 46.15 per cent of the 2017 VAT budget of N1.728 trillion, an increase of 19.78 per cent over the corresponding period in 2016.
Adeosun, who released the details of the 2017 VAT collection yesterday in Abuja, said the highest VAT collection of N86.71 billion was achieved in September 2017, while N84.67 billion and N83.315 billion were recorded in May and October, respectively. The lowest VAT earning of N69.20 billion was in March 2017.
The federal government gets 15 per cent of VAT revenue, while the states and local governments receive 50 per cent and 35 per cent, respectively. The minister, according to a statement by her media aide, Mr. Oluyinka Akintunde reiterated the federal governmentâ€™s commitment to aggressively growing the tax revenue base in order to drive economic growth.
â€œRevenue mobilisation is key to national growth and critical to the success of Nigeriaâ€™s economic reform agenda. We have an unacceptably low level of non-oil revenue and much of that is driven by a failure to collect tax revenues.
â€œWith a tax to Gross Domestic Product ratio of only six per cent, which is one of the lowest levels in the world, we have a lot of work to do if we are going to build a sustainable revenue base that will deliver inclusive growth. Improving VAT and other tax collections is key to Nigeriaâ€™s revenue strategy,â€ the minister said.
She stressed that the countryâ€™s revenue strategy to improve tax through the Voluntary Assets and Income Declaration Scheme (VAIDS), would lead to a broader tax base and more sustainable revenue for all tiers of government.
Adeosun said: â€œThe Nigerian government is committed to the diversification of the nationâ€™s revenue base. Nigeriaâ€™s sole dependence on oil poses enormous challenge on the economy.
â€œOil is only 13 per cent of our Gross Domestic Product (GDP) but it represents 70 per cent of governmentâ€™s revenue, which means if anything happens to oil, it affects everybody.
â€œThe question we need to ask ourselves is: why is the remaining 87 per cent of GDP contributing so little to governmentâ€™s revenue? If we are able to have those other revenues which are much more stable, predictable and less volatile, then if the oil price goes down, weâ€™ll be able to maintain some level of stability,â€ the minister stated.
She assured that the federal government would continue to collaborate with state governments as part of its determined efforts to grow the non-oil revenue base, including raising the VAT collection to N100 billion monthly.
The government, she added, would also extend its tax compliance to the private sector as well as intensify efforts to ensure that Ministries, Departments and Agencies (MDAs) are tax- compliant.