Founding President, Association of National Accountants of Nigeria, ANAN, Omoba Olumuyiwa Sosanya has said if the administration of Value Added Tax, VAT, is decentralized to allow states administer tax law, Nigeria can realize an average total revenue of N560 billion monthly.
This is an equivalent of N6.7 trillion annually, at the five per cent VAT rate, Sosanya added.
He said the VAT generated by the Federal Inland Revenue Service, FIRS, is about N58 billion monthly, pointing out that revenue accruable from VAT could increase 10 times if states are authorised to collect VAT with FIRS.
He said decentralising VAT administration would capture the informal sector, which is over 85 per cent of the economy into the VAT net. “If our economy must reduce its dependence on oil money, the time has come to reform the tax system and other sources of revenue generation,” he said.
Sosonya, who spoke during The Nation’s First National Economic Forum in Lagos, said while VAT has brought fortunes to most developed countries and some African countries, such as South Africa and Ghana, “the FIRS is overwhelmed and struggling to find its bearing to turn the administration of VAT into goldmine for Nigerians”.
He said while South African Revenue Service (SARS) realized R813.8 billion (about N12.5 trillion) in the 2012/2013 fiscal year, Nigeria’s FIRS realised a meagre N861 billion in 2014.
