Dr Samuel Nzekwe, a former President, Association of National Accountants of Nigeria (ANAN), has advised the Federal Government to intensify efforts in implementing the five per cent Valued Added Tax (VAT) rather than increasing it.
Nzekwe gave the advice in an interview with the News Agency of Nigeria (NAN) in Ota, Ogun, on Saturday.
Nzekwe spoke while reacting to the announcement of the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed on VAT increment.
The Federal Executive Council had on Wednesday, approved the proposed plan to increase the VAT from five per cent to 7.2 per cent.
Nzekwe noted that enforcement and implementation of the VAT was the major challenge confronting the country.
“Increasing the nation’s VAT is not the problem but the implementation is the major problem facing the country,” he said.
Nzekwe explained unless the Federal Government worked on effective implementation of VAT, the proposed policy would not achieve any meaningful result.
“VAT system should be reformed because the nation has the problem of implementation,” he said.
He said that less than 50 per cent was in the VAT net because the Federal Inland Revenue Service (FIRS) lacked the capacity to collect it.
Nzekwe urged the FIRS to redouble efforts to getting more people into the VAT net.
He, however, advised the Federal Government to be cautious as the propose increase of VAT from five per cent to 7.2 per cent would drastically affect the new minimum wage in the country.
Nzekwe said that the ability of the Federal Government to effectively reform the VAT system would make more funds available for it rather than increasing the VAT to generate additional revenue.
Comments