|Join Nairaland / LOGIN! / Trending / Recent / New|
Stats: 2,777,516 members, 6,617,885 topics. Date: Sunday, 05 December 2021 at 07:18 PM
|Revenue Shortfall: Senate Approves General Tax Increment by Born2berich: 9:18am On Mar 11, 2015|
Nigerians will soon begin to pay higher taxes in a move by government to shore up its revenue profile and augment the fall in crude oil income, Daily Trust can reveal.
A new tax regime which recommended for a much higher level of collection of taxes in the system is about to be approved by the National Assembly according to Daily Trust findings.
The proposed tax increase is contained in the Medium Term Expenditure Frame work (MTEF) and Fiscal Strategy Paper (FSP), approved by the senate two weeks ago.
Senators gave their nod on the tax increase when they
approved the report of the joint committee on Finance,
National Planning, Economic Affair and Poverty Alleviation chaired by Senator Ahmed Makarfi (PDP, Kaduna).
The committee in its report compared the tax to Gross
Domestic Product (GDP) ratio for some selected countries arguing that Nigeria has the lowest ratio of 3.3 percent compared to an average of 13 percent among the nations sampled.
According to the National Bureau of Statistics (Nigeria), GDP is the market value of all officially recognized final goods and services produced within a country in a given period.
Some sources at the upper chamber said the tax increment will specifically affects the Value Added Tax (VAT) which is currently at the 5 percent to a much higher percentage.
Minister of Finance Mrs Ngozi Okonjo- Iweala has already increased the collection target for the Federal Inland Revenue Service.
Okonjo-Iweala told The Wall Street Journal that the federal government plans to double its value-added tax (VAT) and cancel government projects if oil prices continue to slide.
“It will be a huge exercise,” she said. If oil prices continue to sink, it will also raise its value-added tax, which at five per cent to 10 per cent she said.
However, Daily Trust checks revealed that the House of
Representatives rejected the VAT increase passed by the Senate in passing its own version of the VAT last week.
Sources in the lower chamber said Speaker Aminu Waziri Tambuwal and majority of members expressed stiff opposition to the increase as according to them “it is insensitive and will further subject Nigerians to hardship.”
“Nigerians have already started feeling the hit following
Naira devaluation, fuel scarcity and now they want to
increase VAT apart from other taxes that have been
increased as a result of falling oil prices,” a lawmaker who spoke off record said.
“Based on the current GDP rebasing, concerted effort
should be made in order to arrive at much higher level of collection,” the committee report said.
To this end, the lawmakers argued that the national tax-
base collection should be at least closer to the accepted tax/ GDP expected “of our country.”
Details of the MTEF document as passed by the senate
revealed that the countries surveyed by the committee
include Ghana whose 2013 percentage of DGP to VAT was 14.9, South Africa 26.5, Eqypt 37.4, Angola which is an oil producing nation 18.8, Malasia 16.1, Singapore also oil rich nation 14, China 10.5 and India 10.7. The committee concluded that “the national tax-base collection should be atleats closer to the accepted tax/GDP expected of our economy.”
The last time VAT was increased was in 2007 at the twilight of the administration of former president Olusegun Obasanjo which led to industrial action by the Nigerian Labour Congress (NLC), late president Umaru Musa Yar’adua reversed the increase to 5 percent.
The two chambers also disagreed on the crude oil bench mark price for 2015, senate approved $52 while the House of Representatives pegged it at $54 per barrel.
With the differences in the document between the two
chambers, a harmonization committee would have to set up chambers before the document is forwarded to the president.
|Re: Revenue Shortfall: Senate Approves General Tax Increment by lovat(m): 9:25am On Mar 11, 2015|
When Nigerians start paying tax then they will hold their leaders more accountable. A tax increment will be welcomed if there is also a cut in govt recurrent expenditure.
|Re: Revenue Shortfall: Senate Approves General Tax Increment by aariwa(m): 10:24am On Mar 11, 2015|
Where are those shouting that we still have money in our external reserves?Oga Jona don finish everything pata pata.If anybody shouts transformation where you are stone him
|Re: Revenue Shortfall: Senate Approves General Tax Increment by Born2berich: 9:56am On Mar 12, 2015|
CC: lalasticala, seun and ishilove ..This information should hit front page for proper education about what is likely to happen soon.
|Sections: politics (1) business autos (1) jobs (1) career education (1) romance computers phones travel sports fashion health |
religion celebs tv-movies music-radio literature webmasters programming techmarket
Nairaland - Copyright © 2005 - 2021 Oluwaseun Osewa. All rights reserved. See How To Advertise. 61