VAT collection has grown from N163.3 billion in 2004 to N659.1 billion in 2011.
The Federal Inland Revenue Service said on Monday that it is planning the review of the Value Added Tax, VAT, Act to resolve some important issues that could increase the revenue from taxation.
The Executive Chairman of the revenue service, Kabir Mashi, said at the opening of a nationwide VAT enlightenment campaign in Abuja, that since the Tax was introduced in 1993 in Nigeria, it has become a major contributor to the country’s tax collection, providing an average of about 16 per cent of total collection in the last eight years.
The planned review is coming just as the Chairman announced the collection of over N590.29 billion as revenue from VAT between January and October, with a total of N3.8 trillion tax revenue realised between January and September.
According to Mr. Mashi, VAT collection had grown from N163.3 billion in 2004 to N659.1 billion in 2011, representing an increase of more than 400 per cent, adding that the Tax is the third highest contributor to tax collection in the last eight years.
“Notwithstanding this impressive performance from VAT, we believe that there is significant room for increased tax collection from VAT,” he said, pointing out that this informed the decision to host the interactions with taxpayers to create awareness on its benefits.
“We are aware of the challenges faced by taxpayers in complying with the VAT law and we are working to resolve these challenges.
“We are currently in the process of reviewing the Value Added Tax Act and we will soon come up with a draft VAT Amendment Bill, which will help to resolve these issues,” he said
The revenue agency boss said his organisation is constantly providing specialised training to its tax officers to enable them respond professionally to any queries or requests from taxpayers. He said the review and the training are geared towards providing efficient taxpayers services and promoting voluntary compliance.
Mr. Mashi said there is a need to provide direct enlightenment in specific areas of taxation to the general public as part of the overall taxpayer education processes and to bridge taxpayer knowledge on taxation.
The Coordinating Director, Direct Report Group, Onyekachi Ihedioha, said the event was aimed at evaluating VAT performance as regards rights and obligations of the taxpayers as well as how the evaluation could impact on the proposed VAT law review.
“It is important that we collectively review all grey areas of the law; answer your questions and provide a guide for taxpayers to do the right thing,” he said.
The VAT was introduced by the Value Added Tax Decree No 103 of 1993 as a consumption tax on specified goods and services.
The decree states the goods and services exempted from VAT to include medical and pharmaceutical products, basic food items, books and education materials, baby products, agricultural equipments and products and veterinary medicine, fertilizers, agricultural chemicals and exported goods.
Others are services by microfinance banks and mortgage institutions, plays and performances conducted by educational institutions as part of learning, religious services and exported services.
