Accountant-General wrong, new VAT rate commences February 1 – Minister

Zainab Ahmad
Zainab Ahmad

The Minister of Finance, Budget and National Planning, Zainab Ahmed, on Thursday, contradicted the Accountant General of the Federation, Ahmed Idris, on the effective date for the implementation of the new 7.5 per cent rate for the Value Added Tax (VAT) in the country.

On Monday, President Muhammadu Buhari gave assent to the newly-introduced Finance Act 2019, which, among others, reviewed the VAT rate from 5 to 7.5 per cent.

At the presentation of the draft Finance Bill to the National Assembly on October 14, 2019 for approval, indications were that the implementation of the new VAT would be effective January 1, 2020.

However, at a media briefing in Abuja on Wednesday, the accountant-general told journalists in his office that the new VAT rate took off immediately the president signed the bill into law, on Monday.

“On Monday, the President signed the Finance Bill into law. And just yesterday (Tuesday), I saw a payment, which was prepared in December last year. When I checked the payment was on the VAT rate of 5 per cent. I said no.

“If I am to finalize the payment now, then the VAT rate must be 7.5 per cent. I stopped the payment and asked them to go and recharge the new VAT rate of 7.5 per cent. The payment for 5 per cent VAT has now been overtaken by events.

“That is that person’s luck. The law has to be obeyed. Otherwise, I can be queried for disobeying the law,” the accountant-general said.

Mr Idris insisted every payment that was not carried out for one reason or another before the coming into effect of the Finance Act will now suffer 7.5 per cent charge for VAT, because that is the law, as at today (Tuesday).

But, speaking at the inauguration of the Board of the Federal Inland Revenue Service (FIRS) on Thursday in Abuja, the minister was emphatic on the take-off date for the new VAT rate.

READ ALSO: VAT: How we’re protecting small businesses — Official

“I want to announce that the effective date for the VAT increase from 5 per cent to 7.5 per cent will be the first of February 2020,” the minister announced.

The minister had, on Wednesday, said she was going to make a formal announcement of the effective date for the implementation of the new VAT rate in ‘a few days’ time’.

While announcing February 1 as the official commencement date, Mrs Ahmed explained this would only take effect after all the necessary administrative procedures have been completed.

The administrative procedures include the formal gazette of the Finance Act by the Federal Ministry of Justice.

“Once a bill is signed into law, it takes effect immediately. But, it is to note that there are certain administrative procedures and formalities to be finalised before commencement,” she said.

The minister urged the new FIRS board to be steadfast in delivering its mandate to meet the non-oil revenue target, to support government’s development.

She disclosed that the Tax Appeal Tribunals have identified new cases, with about 75 new tax appeals reported, with a disputed value of N73.3 billion and $19.5 million.

In his speech, the new FIRS Chairman, Muhammad Nami, pledged to mobilise members to pursue the target of increased revenue for the government

“As tax administrators and custodians of the Nigerian Tax System, we have a responsibility to the nation to implement all tax policies and laws in a manner that would ensure optimal benefit to the nation,” he said.

Mr Nami said the board has recognised the huge responsibility on it shoulder, as all tiers of government rely on it to provide adequate funds for their activities and development projects in the face of dwindling oil revenues.

He stressed the commitment of the board to reposition the service for better service anchored on four cardinal pillars.

These include rebuilding the FIRS institutional framework by strengthening the capacity of departments and units to deliver on their mandates on a long term and sustainable basis.

The other pillars include building a robust collaboration to foster a unified service system and building taxpayer and data-centric FIRS.

The board has 14 members and is chaired by Mr Nami.


Advertisement

PT Mag Campaign AD

Support PREMIUM TIMES' journalism of integrity and credibility

Good journalism costs a lot of money. Yet only good journalism can ensure the possibility of a good society, an accountable democracy, and a transparent government.

For continued free access to the best investigative journalism in the country we ask you to consider making a modest support to this noble endeavour.

By contributing to PREMIUM TIMES, you are helping to sustain a journalism of relevance and ensuring it remains free and available to all.

Donate


TEXT AD: To advertise here . Call Willie +2347088095401...



BE THE FIRST TO KNOW! Subscribe to our newsletter

* indicates required

DOWNLOAD THE PREMIUM TIMES MOBILE APP

Now available on

  Premium Times Android mobile applicationPremium Times iOS mobile applicationPremium Times blackberry mobile applicationPremium Times windows mobile application

All rights reserved. This material and any other material on this platform may not be reproduced, published, broadcast, written or distributed in full or in part, without written permission from PREMIUM TIMES.