The Federal Government has raked in N10.1tn from the collection of value-added tax under the regime of the President, Major General Muhammadu Buhari.
This information was disclosed in an analysis of reports obtained from the National Bureau of Statistics, which showed that the VAT earnings continued to rise annually throughout the eight-year period of President Buhari.
This comes against the backdrop of the advice by the Minister of Finance, Zainab Ahmed, that the incoming government should increase the VAT from the current 7.5% to 10%. VAT is a 7.5% consumption tax administered by the Federal Inland Revenue Service when goods are purchased and services are rendered, and it is borne by the final consumer.
Revenue generated from VAT is usually disbursed to the three tiers of government through the Federation Accounts Allocation Committee.
The country earned N759.4bn in 2015, N777.5bn in 2016, N972.4bn in 2017, and N1.1tn in 2018. VAT collections in 2019 amounted to N1.2tn, N1.5tn in 2020, N2.1tn in 2021, and N2.5tn in 2022.
Economists have cautioned against raising the VAT from 7.5% to 10% by the incoming administration, as they argued that it would stifle the country’s economic growth. The finance minister who made the call during a courtesy visit to the headquarters of Voice of Nigeria in Abuja recently said, “VAT is one of the ways to increase revenue, and we still have to increase VAT because, at 7.5%, Nigeria has the lowest VAT rate in the world not in Africa, but in the world. “In Sub-Saharan Africa, the African average is 18%; when you increase your VAT, your gross domestic product will grow.
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