The Value Added Tax (VAT) may be jacked up in an attempt by the Federal Government toharmonise Nigerias Value Added Tax (VAT) Act with the Economic Community of West African States (ECOWAS) directives. At the moment, Nigerias VAT rate is less than one per cent to its Gross Domestic Product (GDP).

The Initiative to adjust the VAT came to the fore yesterday in Abuja at a three-day workshop on Nigerias VAT law organised by the ECOWAS Commission under the context of implementation of the Support Programme for Tax Transition in West Africa (PATF).

At the parley, the government said the countrys VAT performance was the lowest in the West African region, describing the development as worrisome.

PATF is geared towards improving the management of domestic taxation and ensuring better coordination in ECOWAS and West African Economic and Monetary Union (WAEMU) regions.

Director, Tax Policy, Federal Ministry of Finance, Budget and National Planning, Basheer Abdulkadir, said exemptions of VAT in Nigeria were not aligned with those of ECOWAS.

In the meantime, companies that were unable to file their Companies Income Tax returns for this year of assessment (YOA) that fell due onJune 30, 2023 have been given up to August 31 to submit their returns to the Federal Inland Revenue Service (FIRS).

The FIRS, In a statementsigned by Johannes Oluwatobi Wojuola, Special Assistant (Media and Communication) to the Executive Chairman, yesterday, stated that it had received numerous calls from companies requesting for the extension of time to submit their Companies Income Tax (CIT) returns as they were unable to meet up with the deadline due onJune 30, 2023.

The FIRS noted that It agreed to extend the deadline for submission of CIT returns to companies as a measure of goodwill and in line with relevant provisions of the Companies Income Tax Act. All companies whose CIT returns for 2023 year of assessment that fall due between June 30 andAugust 31, 2023 (both days inclusive) are given up to August 31 to submit the returns to the FIRS.

On the VAT, Abdulkadir called for the exemption of few products, goods and services so that poor households could benefit fromthe policy,. He also called for the need to allow for tax input credit for intermediate and capital expenditure.

Our VAT performance or rate is still one of the lowest. Nigeria has a VAT of less than one per cent to the GDP and this is worrisome. Also, we have the lowest VAT within the sub-region with an average of 16 per cent, while VAT rate in Nigeria is 7.5 per cent. So we need a lot of policy changes ontax administration as we also need to come up with strategies to address some of these issues.

He said the exemptions of VAT in Nigeria are not aligned with those of the ECOWAS and we know that these exemptions are some of the issues that have to do with revenue mobilisation under the VAT.

Also speaking, Director of VAT, Federal Inland Revenue Service (FIRS), Lovette Onanuga, stated that VAT has the potential to raise a significant amount of revenue for the government.

Onanuga, while reiterating Nigerias commitment to ensuring the success of the PATF programme, described the workshop as timely.

These three days workshop is very important. For example the study of the Harmonisation of Nigerias VAT Act with ECOWAS Directives will contribute to establishing coherence in the domestic systems of taxation and the realisation of the attainment of a common market and the Evaluation of VAT Performance will enable us to look more deeply into issues that will help improve VAT revenue collections, she said. (The Nation)