The Revenue Mobilization Allocation and Fiscal Commission (RMAFC) has endorsed the new National Tax Policy recently announced by the Federal Government to shore up Nigeria’s dwindling revenue base which over the months, have suffered decline as a result of the shortfall in international oil prices and activities of militant and vandals in the Niger Delta
The policy is expected to guide the operation and review of the nation’s tax system and provide the basis for future tax legislation and administration.
It would be recalled that in July 2016, Acting Chairman of RMAFC Shettima Umar Abba Gana at a 2-day National Revenue Retreat (NRR) organized by the Federal Ministry of Finance in Kano, had canvassed for the upward review of value added tax from 5 per cent to about 7.5 per cent in order to improve the country’s revenue base.
He noted that VAT was a high tax revenue yielding instrument that could be used to shore-up revenue required for financing the ever-expanding public expenditure needs of all tiers of government adding that Nigeria’s current VAT rate of five per cent was one of the lowest in the world.
In a press statement signed by RMAFC’s Spokesperson, Mr Ibrahim Mohammed, the Commission while reiterating its support for initiative said the policy would go a long way in boosting the nation’s revenue base for sustainable national development.
“Since globally, taxation was seen as the most stable source of government revenue for economic development, the upward review of the existing Value Added Tax (VAT) rate on luxury items, as contained in the New Tax Policy has buttressed its position.” The statement read in part.
RMAFC also urged the Federal Government to support all monitoring Agencies including the RMAFC to enhance collection efficiency, block leakages in revenue collection and strengthen intelligence gathering mechanisms so as to free more funds for governments to expand the economy, ensure rapid economic development and create employment.