Some financial experts say the Federal Government’s proposal to the incoming government to raise the Value Added Tax (VAT) from 7.5 per cent to 10 per cent will boost the nation’s revenues, if properly chanelled.
They said on Friday in Lagos, with Prof. Bright Eregha, Department of Economics, Pan Atlantic University, reporting that raising VAT to 10 per cent would have positive impacts on the economy.
“This will enhance the revenues and reduce borrowing from international developmental partners.
“Smaller countries around us are having more VAT collections and why not ours, that has the largest economy in the continent,?” he said.
He said that the incoming government could boost its fiscal revenues by ensuring more eligible payers into tax net.
“Incorporating more people in the informal sector will enhance government’s fiscal revenue projections, especially now that there is decline in our country’s revenues.
“The informal sector is making a lot of money; it’s time to remit anything in form of taxes to the authorities,” the professor said.
Also, Mr Adebayo Adesina, President, Chartered Institute of Taxation of Nigeria (CITAN), urged the incoming government to give more emphasis on indirect taxes to achieve the 10 per cent VAT increase.
“The indirect taxes is the way to go if government is expected to enhance its revenues.
“It a type of tax that is often paid for goods and services without been aware that it is being deducted,” Adesina said.
He said that the incoming government should continue to educate the citizenry on the importance of paying taxes for the growth of the economy.
“Payment of taxes is crucial for our development in order to address competing needs of the society.
“Also, the authorities need to show more transparency and accountability to encourage more citizenry to pay their taxes as it is a social contract between the government and the people,” Adesina said.
In his view, Mr Okechukwu Unegbu, former President, Chartered Institute of Bankers of Nigeria(CIBN), said the Federal Government could expand its VAT increase by automating its operations.
“Utilising more of technology and accurate data is crucial not to evade tax payment.
“Many people, who are living ostentatious lifestyles, are shortchanging the government by paying less than what is expected,” Unegbu said.
He said that the various tiers of government should collaborate more to have an effective tax system in the country.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, has urged the incoming administration to increase the Value Added Tax (VAT) from the current 7.5 per cent to 10 per cent.
According to her, this will stimulate the country’s economic growth.
The minister made the call during a courtesy visit to the headquarters of Voice of Nigeria (VON) in Abuja.
Mrs Ahmed said: “VAT is one of the ways to increase revenue, and we still have to increase VAT because at 7.5 per cent, Nigeria has the lowest VAT rate in the world, not in Africa.
“The African average is 18 per cent; when you increase your VAT, your Gross Domestic Product (GDP) will grow.”
