7.5% VAT implementation takes effect Feb1, 2020 — Finance Minister

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Zainab Ahmed
Finance Minister Zainab Ahmed

…as FG inaugurates FIRS board

By Oduola Funmi, Abuja

The Minister of Finance, Budget and National Planning, Mrs.  Zainab Ahmed has disclosed that the new Value Added Tax (VAT) of 7.5 per cent implementation  will take effect from February 1, 2020.

Ahmed made this known on Thursday during the inauguration of the newly constituted board of the Federal Inland Revenue Service (FIRS).

The announcement comes 24 hours after the Accountant General of the Federation briefed the media that the new VAT regime will take effect from January 15, 2020.

The minister, however, said the new date has put to rest the speculations about the effective take-off date for the new VAT regime.

The minister while inaugurating the new board, reminded the chairman and his members that being members of a country tax administration comes with huge responsibility and they must work hard to show that their appointments were well deserved.

She challenged the new board to come up with ideas and strategies that will improve the country’s tax administration.

According to her, “Our strategies are targeting enhancing revenue growth to Gross Domestic Product (GDP) ratios. We are committed to achieving a 15 per cent revenue to GDP ratio over a medium-term arising this will rise from six to eight per cent which we have on average over the last two years.

“We are confident that under the oversight of this board the FIRS will continue it’s transformation into a premier revenue collective agency with a relentless commitment to enhancing good governance, excellent and integrity in it’s operations and administrative management of the tax system.

“Our economy has clearly turned the corner with great GDP growth increasing from 2.1 per cent in the first quarter of 2019 to 2.28 per cent in the third quarter of 2019 reflecting continuous improvement in the economic fundamentals and our strategy of more diversify inclusive and sustainable growth over a medium-term arising”.

The new chairman of the FIRS board, Mr. Muhammed Nami in his inaugural speech assured the Finance Minister that he would bring his experience and expertise to bear in his new portfolio and called on other members of board to give him unalloyed loyalty and cooperation to give the desired result.

He said all the board members deeply appreciated the great opportunity to serve on this distinguished board which is the second FIRS board that would be governed by provisions of the FIRS Establishment Act 2007.

According to him, “responsibility bestowed on them is critical to the smooth operations of the various tiers and arms of government in Nigeria as well as the well being of the Nigerian people and promised to do everything within their power to achieve collective goals to justify the the confidence reposed in them.

“Nami announced a 13-point priority area the 14 new board members will address in his first 100 days in office includes  capacity building for the FIRS staff, building new enforcement strategies,  restructuring and reposting audit functions, review of structures and corporate strategic retreats to define roles and target setting, overhauling critical  infrastructure,  reposting of collections reports and accounting and reposition of the large and medium taxpayers offices among others”.

Nigerians were displeased when, earlier this week, President Muhammadu Buhari signed the Finance Bill into law.

The displeasure stemmed mainly from concerns that the increase of VAT from five per cent to 7.5per cent (as contained in the Finance Bill), could trigger price hikes for certain products/services.

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