sector’s input rises by 44%

The Federal Government realised a total of N24.8 billion as Value Added Tax (VAT) from banks transactions throughout last year, New Telegraph has learnt. According to the sectoral VAT distribution data released by the National Bureau of Statistics (NBS), this showed that VAT generated from the sector increased by 44 per cent from N17.2 billion recorded in 2019. In accordance with Value Added Tax Act (Cap V1 LFN 2004), all banks and financial institutions, except those exempted, are required to charge VAT on services rendered by them to their customers and account for the same to the Federal Inland Revenue Service (FIRS).

Recall that the banks had, early last year, adjusted VAT charges upward in compliance with the Federal Gov-ernment’s policy which jerked up the consumption tax from 5 per cent to 7.5 per cent, effective February 2020. While there had been a general increase in VAT across sectors due to the upward review, the financial institutions accounted for 3.2 per cent of the total non-import VAT revenue generated by the government in the nine months, which stood at N763 billion.

A quarterly breakdown of the VAT from the sector showed that banks and other financial institutions remitted the sum of N5.4 billion to the government’s coffers in the first quarter. In the second quarter, the sector generated N5.1 billion as VAT for the government, while it remitted N6.9 billion in the third quarter.

The sector’s contribution to VAT in the fourth quarter of 2020 stood at N7.4 billion. Prior to the 2020 record, an analysis of the NBS statistics showed that the sector’s contribution to VAT had declined consistently for three years. For instance, while VAT realised from the sector in 2016 stood at N25 billion, it declined by 17 per cent to N20.8 billion in 2017.

The amount generated from the sector as VAT in 2018 stood at N18.5 billion, which also represented an 11 per cent decline from the previous year’s record. In 2019, tax from the sector declined further by 7 per cent to N17.2 billion. The persistent decline in VAT generated from the sector in the past years, analysts say, may not be unconnected with the decrease in banking activities by Nigerians and an increase in the number of inactive bank accounts. However, with the increase in VAT from 5 per cent to 7.5 per cent, the government would be getting more money from the sector.

To achieve efficiency in the collection of the tax, the FIRS had, in March last year, issued a Public Notice informing taxpayers of automation of the VAT Collection System. The Automated VAT Platform (VATrac), which enables efficient and seamless collection and remittance of VAT on relevant transactions in the wholesale/retail sector and direct audit/reconciliation of all VAT transactions, became effective on April 1, 2020. Industry analysts noted that the introduction of VATrac demonstrated the FIRS’ commitment to leverage technology to improve tax administration in Nigeria.

It is anticipated that the use of technology to enforce VAT compliance would ultimately result in increased tax revenue by minimizing leakages, widening the tax net, and reducing the cost of administration.

https://www.newtelegraphng.com/vat-fg-rakes-in-n24-8bn-from-bank-customers/

Yet we don't see the benefits of our tax, sometimes I actually wonder why we still have a government if at the end of the day the government only ends up making majority of it's citizens poorer year in year out, the purpose of having a government is to improve the lives and security of it's citizens, but in Nigeria the reverse is the case, sometimes I actually feel we should just privatize the government here and only pay for services that they offer 100%, anything short of 100% citizens won't pay....

NamelessOGBENI:

You know I love this perception right..

Politicians should be place on contractual agreement, if you can't stick with the terms and conditions of the state, you can take the L..

I dey tell you bro...

Tired of making comment on things like this . Naija keep it up n the few making d money on people’s sweats

The fvck

Niggarr!!

Una never see anything

Those who cannot remember the past are condemned to repeat

Just watch as the masses repeat this same mistake in 2023

What's will the money be used for?

YET THEY'RE STILL BORROWING ,EVEN WHEN CUSTOM SAID THEY'RE MAKING 8 BILLION DAILY

Alhamdulillahi

Thieves

APC don kill us. Too many charges from my GTB bank account

Nah eh! No qualms
And yet we keep borrowing

Dis goverment go soon kill us of hunger b4 d hunger itself kill us

Milking the masses to enrich themselves...

It is well...

Too bad those are the top will share the money and use it for personal purposes. Too bad

Cash Out

FG still milking poor masses. O mase o

Yahoo Yahoo FG

The banks are ripping the people and the government is also doing it's own yahoo yahoo.Another money to be looted.

It will be mismanaged and we will still go cap in hand to china for loan to finance the budget

The government in connivance with different institutions are ripping Nigerians off. When courts of the lands issue ultimatum regarding lapses or overcharges, these institutions disregard it totally because they are doing these crimes with connection with government officials!

Nigeria has become a disgrace to the African continent and the world at large. Please get your facts right before you quote me negatively!

Rubbish country. I go soon japa

And nothing to show for it.
And some people said Nigerians don't pay tax.

Stockholm syndrome, sophisticated morons are some challenges of the Nigerian masses

chidi2pus:


Una never see anything

Those who cannot remember the past are condemned to repeat

Just watch as the masses repeat this same mistake in 2023