FG commences implementation of 7.5 per cent VAT increment

The Accountant General of the Federation, Idris Ahmed, on Wednesday, said the formal implementation of 7.5 percent VAT rate has commenced this week.

Speaking with finance reporters in Abuja, Ahmed explained that he got a payment of the tax based on old rate of five percent on Wednesday but he rejected it.

President Muhammadu Buhari signed the 2019 Finance Bill, on Monday, triggering the commencement of a new regime of taxes, rates and tariffs for 2020 fiscal year.

Also from Tuesday, companies making annual turnover of N25 million will no longer pay company income tax.

A lower CIT rate of 20 per cent applies to medium-sized companies with a turnover between N25m and N100m.

A bonus of 2 per cent of tax payable will be granted to medium-sized companies while large companies will get one per cent bonus for early payment of CIT.

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Ahmed disclosed that there was delay in the full take-off of the Open Government Treasury Transparency Portal across Ministries, Department and Agencies (MDAs) because of closure of government accounts by end of 2019.

Other reasons for the delay include the need to train account officers of MDAs to understand what is required of them and know how to upload information on the portal; public sensitization on the new initiative and receipt and processing of data from MDAs.

Buhari launched the Portal last year to open government financial activities to public scrutiny in terms of revenue and expenditure of MDAs.

With the portal, Accountant General of the Federation (AGF) is mandated to publish daily, treasury statement which will provide information about what came into the national purse and what went out every single day.

The AGF and all Accounting Officers are under obligation to publish daily payments.

Giving updates on compliance with the new finance rule for MDAs operations, Ahmed said that, “We are now training personnel that will upload information into the portal because it’s very important to train them.

“We have to suspend that to focus on the closure of account as required by law in December. Our staff are back and we will concentrate on the financial portal.”

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