Nigerians Enjoy lowest VAT rate –FIRS boss

firsbossThe Executive Chairman of the Federal Inland Revenue Service (FIRS), Mrs. Ifueko Omoigui-Okauru has said that Nigeria is the only country where Value Added Tax (VAT) is lowest at five percent.

According to her the five percent VAT operational in the country was against the ECOWAS protocol agreement which prescribes 10 percent for all forms of taxes even as member countries of the commonwealth are beginning to move away from direct tax to indirect tax.

Represented at the FIRS Lagos Mainland Region Enlarged Management/Town Hall Meeting by Acting Coordinating Director, Compliance and Enforcement of FIRS, Dr.Teju Somorin, she said the excuse being mooted in various quarters that the downward trend confronting the economy will make the implementation difficult does not hold water. She added that, waiting for the economy to be on its right footing before the implementation of the policy would only prolong the problem.

She pointed out that the agency was confronted with the same problem when it first introduced the idea to implement VAT in 1993. Government’s resolve and political will to go ahead with the implementation was the only saving grace.

“When will the economy be right? And judging by the fact that there will not be an appropriate time, especially if we want to move ahead as a nation, we should learn to take a decision as a nation and stand by it,” she argued.

Again, she said all the member countries of the commonwealth are beginning to move away from direct tax to indirect tax, stressing that government as a way of cushioning the effect, should strive to make sure that the effect would not be much on the citizens.

In this regard, she explained that FIRS was working assiduously to ensure that the amended Personal Income Tax Act is released as a way of further ensuring that people pay less tax in order to absorb the shock inherent in the VAT increase.

Justifying the reasons for the increase further, the FIRS boss contended that the police and other sectors of the economy are constantly requesting for additional funding and instead of increasing taxes in every area, the FG decided to increase VAT,which,she said had been impossible to increase since 2007.

On the essence of the enlarged management with the theme “Integrating Tax Functions and Processes for Improved Performance” she said the introduction of new systems and platforms has come with some challenges, saying this informed the decision of FIRS to embark on increased training and re-training of staff both locally and overseas to ensure seamless use of these new platforms and enhance overall productivity.

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