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Speaking at the just concluded 2019, Nigeria Tax Outlook Stakeholders Event was the Executive Chairman, FIRS Mr. Tunde Fowler. Photo/Twitter/ng_tax101
Chairman, Federal Inland Revenue Service (FIRS), Babatunde Fowler, yesterday said Value Added Tax (VAT) is designed to support poor Nigerians and not create hardship for them.
He explained that it is charged on consumption and capacity to consume, noting that revenue generated from VAT is channeled towards assisting the poor by providing basic amenities.
Fowler made this known in a statement in Lagos at the maiden edition of the Nigeria Tax Outlook (NTO) Stakeholders Roundtable Series organised by Nigeria Taxpayer Hub.
His words: “When you don’t consume certain goods and services, you are not liable to pay VAT charges on those items. VAT is not charged on all medical and pharmaceutical products.
“It is not charged on basic food items. It is not charged on books and educational materials. It is not charged on baby products, fertilizers, locally produced agricultural and veterinary medicine, farming machinery and farming transportation equipment.”
He also explained that VAT is not charged on all exports, plant machinery and goods imported for use in Export Processing Zones (EPZs) and Free Trade Zones (FTZs), provided that 100 per cent production of such companies are exported.
Fowler noted that medical services, services rendered by community banks, mortgage institutions, plays and performances conducted by educational institutions, as part of learning and exported services, are exempted from VAT.
He further clarified what he told Senate Committee on Finance last week that he sought increase in the number of Nigerians and companies paying VAT and not 50 per cent increase in VAT rate.
He added that he also advocated a reduction in Companies Income Tax (CIT) rate for small businesses, so as to improve compliance.
At the event, experts in tax practice, administration and tax consultants from KPMG, Pedabo, Deloitte, Ascension, PWC, Anderson Tax, Lagos State Internal Revenue Service (LIRS) and Drudge, among others, pointed ways forward for tax practice in the country.
