The Federal Government said it would continue to collaborate with state governments as part of its determined efforts to grow the non-oil revenue base, including raising revenue from value-added tax (VAT) monthly collection to N100 billion.
The new target comes on the heels of the release of the total VAT revenue collected year to date, which amounted to N797.51 billion, and, which according to the authorities, was below expectations.
Kemi Adeosun, the finance minister said the government in doing this would also extend its tax compliance drive to the private sector as well as intensify efforts in ensuring that the ministries, departments, and agencies (MDAs) are tax compliant.
She stated that the federal government is committed to aggressively growing the tax revenue base in order drive economic growth.
- Ellah Lakes Plc receives SEC approval to raise N2.90bn via rights issue
- Nigeria misses out in UAE’s $450m Africa carbon credits buy-out
- IMF urge Nigeria,others to harness tax potential for development goals
- How cyber insurance can protect Nigeria’s digital ecosystem
- Nigeria losing N10bn annually over mismanagement in plastic industry
“Revenue mobilization is key to national growth and critical to the success of Nigeria’s economic reform agenda. We have an unacceptably low level of non-oil revenue and much of that is driven by a failure to collect tax revenues.
“With a tax to gross domestic product ratio of only six percent, which is one of the lowest levels in the world, we have a lot of work to do if we are going to build a sustainable revenue base that will deliver inclusive growth. Improving VAT and other tax collections is key to Nigeria’s revenue strategy,” Adeosun said.
The Finance Minister maintained that the country’s revenue strategy to improve tax through the voluntary assets and income declaration scheme (VAIDS), would lead to a broader tax base and more sustainable revenue for all tiers of government.
“The Nigerian government is committed to the diversification of the nation’s revenue base. Nigeria’s sole dependence on oil poses enormous challenge on the economy.
“Oil is only 13 percent of our gross domestic product (GDP) but it represents 70 percent of government’s revenue, which means if anything happens to oil, it affects everybody.
“The question we need to ask ourselves is: why is the remaining 87 percent of GDP contributing so little to government’s revenue? If we are able to have those other revenues which are much more stable, predictable and less volatile, then if the oil price goes down, we’ll be able to maintain some level of stability,” she noted.
Adeosun said that revenue from VAT came to N797.51 billion between January and October 2017. Also, the non-oil revenue represents 46.15 percent of the 2017 VAT budget of N1.728 trillion.
This is, however, an increase of 19.78 percent over the corresponding period in 2016.
The Minister, who released the details of the 2017 VAT collection on Tuesday in Abuja, said the highest VAT collection of N86.71 billion was achieved in September 2017, while N84.67 billion and N83.315 billion were recorded in May and October, respectively. The lowest VAT earning of N69.20 billion was in March 2017.
The federal government gets 15 percent of VAT revenue, while the states and local governments receive 50 percent and 35 percent, respectively.