FIRS denies report of plan to increase VAT by 50 per cent

FIRS denies report of plan to increase VAT by 50 per cent

- The Federal Inland Revenue Service has said there was no plan to increase VAT by 50 per cent

- The agency said it instead called for reduction of tax for small businesses

The Federal Inland Revenue Service (FIRS) on Wednesday, March 20, refuted report of planned increment of Value Added Tax (VAT) by 50 per cent to meet up payment of the newly proposed minimum wage.

The head, Communication and Servicom Department, Wahab Gbadamosi, made this known in a statement in Abuja.

The minister of budget and national planning, Senator Udo Udoma, and Dr Babatunde Fowler, FIRS chairman, had appeared before Senate Committee on Finance at the 2019-2021 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper ((PSP) interactive meeting on Tuesday.

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Gbadamosi explained that at the meeting, Fowler had called for an increase in the number of Nigerians and companies paying VAT and not a 50 per cent increase in VAT rate as reported.

He said that contrary to reports in the media, the FIRS chairman called for a reduction in Companies Income Tax (CIT) rate for small businesses so as to improve compliance.

"Though he indicated that there should be an increase in VAT rate by the end of the year, he never for once suggested a 50 per cent hike of any percentage increase at all.

"Rather, he promised improved collection in CIT, Petroleum Profits Tax, PPT and VAT in 2019 relative to the collection performance of the Service in 2018," he said.

Legit.ng had reported that the Federal Inland Revenue Service, on Tuesday, March 19, urged Nigerians to brace for an increase in Value Added Tax (VAT) by between 35 and 50 per cent in 2019.

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This will raise the VAT from the current five per cent to between 6.75 and 7.25 per cent.

The chairman of FIRS, Babatunde Fowler, dropped the hint when he appeared alongside other top officials in the Federal Ministry of Finance before the Senate Committee on Finance in Abuja.

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Source: Legit

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