The Federal Inland Revenue Service (FIRS) on Wednesday dispelled reports of planned increment of Value Added Tax (VAT) by 50 per cent to meet up payment of the proposed new minimum wage.
Following the announcement of senate approval of 30,000 as the new minimum wage, there were reports of plans by the Federal Government to increase VAT by up to 50 per cent to raise funds for the implementation of the new minimum wage.
However, the Head, Communication and Servicom Department of FIRS, Wahab Gbadamosi, has discredited these claims through a statement in Abuja.
The Minister of Budget and National Planning, Sen. Udo Udoma and Babatunde Fowler, FIRS Chairman, had appeared before Senate Committee on Finance at the 2019-2021 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper ((PSP) interactive meeting on Tuesday.
Gbadamosi explained that at the meeting, Fowler had called for an increase in the number of Nigerians and companies paying VAT and not a 50 per cent increase in VAT rate as reported.
Furthermore, he said that contrary to reports in the media, the FIRS Chairman called for a reduction in Companies Income Tax (CIT) rate for small businesses so as to improve compliance.
“Though he indicated that there should be an increase in VAT rate by the end of the year, he never for once suggested a 50 per cent hike of any percentage increase at all.
“Rather, he promised improved collection in CIT, Petroleum Profits Tax, PPT and VAT in 2019 relative to the collection performance of the Service in 2018,” he said.
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