7.5% VAT: Minister, Accountant General disagree over takeoff date
The Minister of Finance, Budget and National Planning Mrs. Zainab Ahmed has disagreed with the Accountant General of the Federation, Mr. Ahmed Idris over the commencement of the implementation of the 7.5 percent increase in Value Added Tax (VAT).
Whilst the Accountant General said the implementation of the new VAT commenced with the signing of the Finance Act by President Muhammadu Buhari, the minister said implementation will begin February 1, 2020.
The minister stated this yesterday while inaugurating the board of the Federal Inland Revenue Services (FIRS).
“I want to also announce that the effective date for the VAT increase from 5 percent to 7.5 percent will be the first of February 2020,” she said.
According to the minister, the new date has put to rest the speculations about the effective take off date for the new VAT regime.
She said the implementation will commence “after all the necessary administrative procedures have been completed, especially the gazette of the 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 explained further.
The VAT increase which is meant to help government achieve its revenue projections for the 2020 Budget (N8.155 trillion) is a part of the tax reforms included in the 2019 Finance Act.
With the Act, there will be more revenue to finance key government projects especially in the areas of health, education and critical infrastructure.
She also tasked the newly inaugurated board members to come up with ideas and strategies that will improve the country’s tax administration.
“I want to encourage the new board to ensure steadfastness of the service in meeting nonoil revenue target to support government development,” she said.
She also said the Tax Appeal Tribunals have identified new cases. “They have reported 75 new tax appeals with a disputed value of N73.3 billion and $19.5 million,” she said.
The Executive Chairman of
FIRS and Chairman of the board, Mr Muhammad M. Nami said his efforts to reposition the FIRS to better serve taxpayers would be anchored on four cardinal pillars.
They are rebuilding FIRS institutional framework, collaborating with stakeholders, building a customer centric institution and also a data centric one.
He stated that he would priotise with his first 100 days in office building of staff capacity for service delivery, closing all lien cases in order to build new enforcement strategies, restructuring and repositioning of audit function amongst others.