VAT increase: CSJ urges FIRS to expand tax net

CENTRE for Social Justice (CSJ) has asked Federal Inland Revenue Service (FIRS) to expand the tax net for the proposed increase in the rate of Value Added Tax (VAT) to meaningfully impact on the economy.

“The way forward is to ensure that all persons liable to VAT, collect and remit the same to the appropriate authorities,” CSJ said in a statement made available to Tribune Online.

The statement endorsed by Lead Director, Eze Onyekpere Esq commended the decision to increase in VAT from the current rate of five per cent to 7.2 per cent.

“This will increase available resources for budget implementation and development across the three tiers of government.

“We recall that Nigeria’s tax to gross domestic product (GDP) ratio is one of the lowest in the world and indeed in the West African sub-region.

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“We further recall that Nigeria’s VAT rate is one of the lowest in the sub-region.

“We also recall that from our 2018 and 2019 Federal Government budget analysis, CSJ had recommended an increase in VAT as one the ways to shore up government revenue.”

The Centre, however, warned that the additional revenue to be realised from this increase may not be substantial if the tax authorities do not take concerted and targeted steps to increase the number of natural and artificial persons who will pay the new VAT.

“While we take note of the arguments about the harsh economic conditions and how the increase will impose hardship on the poor, we note that all Nigerians ought to make sacrifices considering Nigeria’s parlous fiscal condition.

“Indeed, Nigeria is facing a fiscal crisis which ideally, the leadership should explain to Nigerians instead of the current official attitude that all is well.

“These hard times call for increased fiscal transparency and accountability on the part of government which manages public resources. But governments all over the world are known to revel in opacity.

“It is, therefore, our duty as citizens, as we pay this new increased VAT to demand utmost accountability and transparency from our leaders.

“We cannot afford to go to sleep as we have done over the years and expect things to improve.”