A financial expert and former President of the Association of National Accountants of Nigeria, ANAN, Dr Samuel Nzekwe, has said increasing the nation’s Value Added Tax, VAT, would not solve the revenue challenges in the country.
Mr Nzekwe, who spoke against the backdrop of the Federal Government’s move to increase the VAT in order to meet the demand of the new N30,000 national minimum wage, emphasised that such decision would contribute to inflation rises in the country.
According to him, there is a need for government to perfect new opportunities of generating more VAT in the country.
Recall that the Minister of Budget and Planning, Udo Udoma, had on Tuesday said the Federal Government is planning to increase the nation’s VAT to 50 per cent from 2 per cent to meet its challenge.
Mr Nzekwe said: “The Federal Inland Revenue Service, FIRS, has not been able to capture all people into the VAT net.
“A lot of people in the country are not paying VAT. More people are paying taxes without VAT due to poor compliance on the FIRS officials.
“What they should have done is to get more people to pay VAT,’’ he said.
Mr Nzekwe noted that compliance was the major problem with the provisions of VAT because of its poor management.
The ex-ANAN president suggested that the FIRS should redouble its efforts to ensure that more people were captured into the VAT net in order to boost the nation’s revenues.
He also said increasing VAT was an indirect way of inflicting pains and shortchanging Nigerians which was not good for the economy.