FG To Increase VAT – Finance Minister

 

The Minister of Finance, Mrs Zainab Ahmed, says the Federal Government will increase the Value Added Tax on some items in the course of the year.

Some of the items according to her, will include carbonated drinks as well as some luxury items.

She stated this on Wednesday at the launch of the Strategic Revenue Growth Initiative in Abuja, targeted at improving revenue sources for government.

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Ahmed said the move had become imperative as a result of the fiscal challenges the government is confronted with in providing infrastructure for its people.

She, however, noted that the increment will only be done after due consultation with the National Assembly.

“There will be a VAT increase. During the course of 2019, we will have clarity as to which items and what the rate will be and we will have to take a request to the National Assembly for amendment before it takes effect.

“There is also going to be luxury tax.

Already, there is luxury tax imposed on things like jets, yachts and few exceptional items that are classified as luxury and the Chairman FIRS will speak to that but we are contemplating increasing excise duties on carbonated drinks just like we have excise duties now on Tobacco and alcohol.

“But this is going to be a subject of study because we have to identify which ones will be affected and the best way in which to apply the taxes”.

Customs Says No Law Backing Levy For Luxury Items

Customs Says No Law Backing Levy For Luxury ItemsThe Comptroller General of the Nigeria Customs Service, Colonel Hameed Ali (rtd), has blamed the negative effect of some government trade and economic policies for inability of the Service to meet its 2016 revenue target of N937bn.

Colonel Ali stated this position on Wednesday when he appeared before the House of Representatives Committee on Customs, during an excise to review the 2016 budget performance of Customs and defend its 2017 budget.

“Some government deliberate trade and economic policies also negate the collection of the revenue that we are supposed to.

“If you recall we have in the last budget, also mentioned the 41 items which are now excluded from accessing FOREX (foreign exchange) through the Central Bank of Nigeria,” he said.

The Customs boss told the lawmakers that no revenue has been collected through the levy on luxury items, saying there was no legal backing to enforce the collection of the proposed levy.

He stressed the importance of a legal instrument to back the collection of levy on such items, saying its absence has negatively affected the Customs.

“That policy has reduced by quite a percentage the importation of items into this country. Our collection as far as the law is concern is on import, and the lesser the import the lesser the collection.

“So that has also negatively affected the collection of levy on import of luxury goods. In the absence of a legal instrument or government policy that mandates Customs to collect levy, we have to allow them to come into the country,” he said.

The Customs has a 2017 revenue target of N772.88bn, a figure which is 17% lower than its 2016 revenue target.