TO further boost revenues, particularly in non-oil sectors, plans are afoot by federal government to tweak inland revenues by raising Value Added Tax payable on goods and services to eight per cent from the current five per cent.
Former Minister of Finance, Mrs. Zainab Ahmed, gave the indication yesterday, while speaking at the ongoing Bloomberg Emerging and Frontier Forum in London.
She said that expected increase would have come on steam by 2020.
“We have developed a strategic revenue growth initiative, which we have started implementing. Our target is to increase revenue to 65 per cent minimum in 2019 so that in the next three years, we are able to attain 80-85 per cent of our revenue target. We are looking at adding value-added tax from 5per cent to 7.5per cent. 5per cent is one of the lowest VAT globally.
The increase will not be done overnight but hopefully, by the next budget (2020), the new increase will take effect. We recently increased the minimum wage and one of the agreements we had with labour was that there would be some marginal increase on VAT to enable us to handle the incremental cost of increasing wages,” Ahmed said.
It will be recalled that VAT is a consumption tax levied on a product at every stage of processing-value addition whose incidence falls on the consumer.