VAT accounts for 16% of total FIRS collection
The Federal Inland Revenue Service has described Value Added Tax as the third highest contributor to the nation's tax revenue in the past eight years, accounting for 16 per cent of total collection in the period.
The acting Executive Chairman, FIRS, Alhaji Kabir Mashi, disclosed during an enlightenment campaign in Lagos that VAT collection had witnessed a 400 per cent increase in the period under review, rising from N165bn in 2003 to N659.15bn in 2011.
The FIRS boss, who was represented by the Director of Communication, Mr. Emmanuel Obeta, said there was room for improvement as the organisation would soon come up with the draft VAT amendment bill.
VAT is a consumption tax payable on goods and service consumed by individuals, government agencies and business organisations.
Also speaking, the Regional Director in charge of Lagos Island, FIRS, Mr. Kingsley Okego, lamented that the VAT law in the country had yet to attain its peak even though that form of taxation was the most important and best developed of all taxes.
He added that FIRS decided to spearhead the VAT campaign in order to evaluate its performance as regards the rights and obligations of the tax payers and how the evaluation could impact on the law and its review.
'The target of VAT is consumption of goods and services, and unless an item is specifically exempted by law, the consumer is liable to pay the tax. It can also be defined as a tax on spending/consumption levied at every stage of a transaction but eventually borne by the final consumer of such goods and services. It is levied at the rate of five per cent,' Okego said.
The total VAT collection for 2012 was put at N710.5bn as against N659.15bn in 2011.
The quarterly analysis showed that N175.9bn was raked in the first quarter of the year. This comprised N135.7bn from non-import VAT, while the Nigeria Customs Service's Import VAT made up the balance of N40.14bn or 3.42 per cent of the total figure.
In the second quarter, VAT receipts amounted to N179bn with the NCS import VAT accounting for N40.02bn and non-import VAT of N139bn making up the rest.
The NCS import and non-import VAT recorded N170.69bn in the third quarter of 2012.
But in the fourth quarter, the VAT collection fell short of the target as N185.02bn was realised as against the envisaged N200.7bn.
Out of the amount, NCS import VAT accounted for N44.4bn, while the non-import VAT moved up to N140.6bn.