VAT Earnings Hit N797bn In 10 Months – Adeosun
…As FG seeks private sector’s tax compliance
BY COBHAM NSA, ABUJA – The Federal Government will pursue tax compliance by the private sector to compliment the rising earnings from Value Added Tax (VAT) that hit N797.51 billion mark in the last 10 months.
Minister of Finance, Mrs Kemi Adeosun said on Tuesday that the figure indicates VAT earnings into the Federation Account between January and October 2017 with the non-oil revenue representing 46.15 per cent of the 2017 VAT budget of N1.728 trillion.
She said the amount however represents an increase of 19.78 per cent over the corresponding period in 2016 with the highest VAT collection of N86.71 billion recorded in September 2017. In a breakdown of the 2017 VAT collection in Abuja, Mrs Adeosun said the impressive September figure was closely followed by N84.67 billion and N83.315 billion collected in May and October, 2017.
The Minister, who announced N69.20 billion as the lowest VAT earning recorded in March 2017, said the Federal Government is committed to aggressively growing the tax revenue base towards driving sustainable economic growth and development in the country.
According to her, “Revenue mobilisation is key to national growth and critical to the success of Nigeria’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.”
She said though Nigeria has a tax to Gross Domestic Product (GDP) ratio of only six per cent that ranks among the lowest levels globally, “we have a lot of work to do if we are going to build a sustainable revenue base that will deliver inclusive growth.”
Adeosun, while maintaining that enhanced VAT and other tax collections are vital to Nigeria’s revenue generating plan, said it is imperative to expand tax income through Voluntary Assets and Income Declaration Scheme (VAIDS), leading to a broader tax base and more sustainable revenue for all tiers of government.
For her, “The Nigerian Government is committed to the diversification of the nation’s revenue base. Nigeria’s sole dependence on oil poses enormous challenge on the economy, adding that; “Oil is only 13 per cent of our Gross Domestic Product (GDP) but it represents 70 per cent of government’s revenue, which means if anything happens to oil, it affects everybody.”
The Minister said if the country is able to access other revenues sources that are much more stable, predictable and less volatile, it will be easy for government to sustain some level of stability should there be any slump in the global oil price.
She gave assurance that the Federal Government would collaborate with State Governments as part of deliberate efforts to grow the non-oil revenue base, including boosting VAT earnings to a monthly figure of N100 billion.
The Minister said aside from extending its tax compliance mechanism to effectively rein in private sector tariffs, efforts would also be intensified to ensure that all Ministries, Departments and Agencies (MDAs) of government are tax compliant.
In the current distribution, the Federal Government gets 15 per cent of VAT revenue, with the States and Local Governments receiving 50 and 35 per cent respectively.
