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From Uche Usim, Abuja
The Revenue Mobilisation Allocation and Fiscal Commission says it endorsed the new National Tax Policy recently announced by the Federal Government due to its potential to shore up the nation’s dwindling revenue.
Nigeria’s foreign reserves suffered a remarkable decline as a result of shortfalls in international oil prices coupled with the activities of militants and vandals in the Niger Delta.
Consequently, the Acting Chairman of RMAFC, Shettima Umar Abba Gana, in July 2016, canvassed the upward review of Value Added Tax (VAT) from 5 per cent to about 7.5 per cent in order to improve the country’s revenue base.
His views were captured in a paper he presented at a two-Day National Revenue Retreat (NRR) organised by the Federal Ministry of Finance in Kano titled: “Expanding Nigeria’s Revenue Base: Strategies and New Sources”.
He observed that VAT was a high tax revenue yielding instrument that could be used to shore-up revenue required for financing the ever-expanding public expenditure needs of all tiers of government, adding that Nigeria’s current VAT rate of five per cent was one of the lowest in the world.
Abba Gana reiterated his support for initiatives such as the newly introduced revised tax policy which would go a long way in boosting the nation’s revenue base for sustainable national development.
Commending the government’s bold and courageous step, the Commission further asserted that since globally, taxation was seen as the most stable source of government revenue for economic development, the upward review of the existing Value Added Tax (VAT) rate on luxury items, as contained in the New Tax Policy has buttressed its position.
Apart from the upward review of the VAT rate on luxury items, RMAFC also urged the Federal Government to support all monitoring agencies including the RMAFC to enhance collection efficiency, block leakages in revenue collection and strengthen intelligence gathering mechanisms so as to free more funds for governments to expand the economy, ensure rapid economic development and create employment.
