VAT is not targeted at impoverishing Nigerians – FIRS boss

The Chairman of the Federal Inland Revenue Service, Babatunde Fowler has dismissed claims that the planned increase in Value Added Tax from 5 per cent to 7.5 per cent is targeted at making Nigerians poorer.

Fowler was speaking at the public presentation and breakdown of the 2020 budget proposal yesterday in Abuja.

He said Value Added Tax is a tax of “choice” as the federal government has exempted very vital items from inclusion into Value Added Tax.

“Key basic amenities like education, agricultural and veterinary medicine, farming machinery, transportation equipment, all exports excluding non-oil exports, plant machinery for utilization in gas exploration in the downstream petroleum operations and goods imported for use in exports processing zones.

“VAT is a tax with a choice, it is a consumption tax, if you decide to have your residence in a hotel or your meal in a restaurant, then you pay the tax, it is those who have disposable incomes that will pay VAT. To explain taxes better, we have to look what has occurred over the last three years especially in the area of Value Added Tax, Company Income Tax and Stamp duty tax.

“There has been a 32.8 per cent increase in Value Added Tax, 39 per cent in Company Income Tax and 208 per cent in stamp duty tax. Therefore the planned increase requires collaboration. Therefore, it is a crime for any organization or company to operate without paying tax and in the other way round making huge profits.

“In countries like Gambia, Ghana, Ivory Coast, United Kingdom, United Arab Emirates, South Africa among others, VAT is a very essential component of their revenue generation and the planned hike in Nigeria’s Value Added Tax is for the betterment of Nigeria,” Fowler explained.