VAT: FG earns N1.1tn, recovers N33bn from defaulters

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The National Bureau of Statistics (NBS) has revealed that said that Nigeria earned  N1.1tn as Value Added Tax revenue in the 2018.

The data was contained in the VAT report for the fourth quarter of 2018 recently released by the NBS.

According to the report, the Federal Government earned N269.79bn in the first quarter, N266.73bn in the second quarter, N273.5bn in the third quarter, and N298.01bn in the fourth quarter.

“Other manufacturing generated the highest amount of VAT of N28.82bn, which was closely followed by professional services and commercial and trading, both generating N24.12bn and N16.02bn, respectively,” the report noted.

It also revealed that the mining sector tuned in the minimum amount (N35.75m), followed by pharmaceutical, soaps and toiletries, and chemical, paints and allied industries with N209.33m and N258.39m generated respectively.

“Sectoral distribution of VAT data Q4,2018 reflected that the sum of N298.01bn was generated as VAT in Q4 2018 as against N273.50bn generated in Q3 2018 and N266.73bn in Q2 2018, representing 8.96 per cent increase quarter-on-quarter and 17.28 per cent year-on-year.”

It also noted that, from the amount generated in the fourth quarter, N138.42bn was generated as non-import VAT locally while N47.89bn was generated as non-import VAT for foreign.

The NBS added that the balance of N111.71bn was generated as Nigeria Customs Service-import VAT.

Similarly, the Federal Inland Revenue Service disclosed that it had recovered over N33bn from firms who have earlier refused to remit the withholding tax and VAT they collected from consumers.

The Chairman, FIRS, Mr Babatunde Fowler, revealed  this in Lagos on Thursday during an interactive forum with manufacturers on the VAT and withholding tax. He added that 1.2 million business accounts have been captured, with over 10 million individuals also added to the tax net.

Explaining why his agency freezed some firms’ accounts were frozen by banks for non-compliance, Fowler said the firms had collected withholding tax and VAT from consumers without remitting them to the government.

He said the agency was prompted to investigate the perceived inadequacies in their remittances, noting that “Till date, over N33bn has been paid from those accounts.”

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He lamented that the agency found over N96bn in unpaid taxes, with 50 per cent of them related to VAT.

He said, “What this means is that various operators who charged VAT did not remit them. But our main focus is to protect taxpayers whose withholding taxes were being deducted and not remitted as well as consumers whose VAT was being deducted and not remitted.

“One has to be aware that 85 per cent of the VAT goes to the state governments that are looking for money to pay salaries.”

According to the FIRS chairman, about 59,000 of the defaulting firms had no Tax Identification Numbers but were collecting VAT from customers.

He explained that the new system of tax filing would enable firms to know if their taxes had been remitted to the government or not, adding, “Within 45 days, if you pay withholding tax and you do not get an email confirming the payment, you  should know that they have not remitted the tax.”

Fowler noted that many of the defaulters had come up to regularise their accounts in recent weeks, adding that the agency had given an additional 30 days grace for  more people to do the same.

He said, “We are not even saying they should pay everything.  Let them make some payment of what they had deducted for withholding tax and VAT.”

Fowler expresses his regrets that during the exercise, some accounts were frozen in error, adding that he had personally apologised to the firms involved and ordered the unfreezing of the accounts within 48 hours.

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