States fail to remit N41bn VAT to FIRS

August 17th, 2018

By Chesa Chesa

The National Economic Council (NEC) has announced that most states in the federation have failed to remit N41billion in Value Added Tax (VAT) to the Federal Inland Revenue Service (FIRS)

FIRS Chairman, Babatunde Fowler, disclosed this to NEC on Thursday in Abuja.

Fowler said that the states only remitted about N40 billion VAT and withholding tax to FIRS between January and July this year.

Governor Abubakar Badaru of Jigawa State told State House Correspondents after NEC meeting presided over by Acting President Yemi Osinbajo on Thursday in Abuja that, “we had a briefing from the chairman of FIRS. It dwelt on the two aspects of tax. One is VAT that is being collected by states. He informed the states what the positions are, that there are outstanding VATs from the states to the tune of N41 billion.

“FIRS also came up with new techniques/platform that will help in VAT/withholding tax collection. It is very important when talking of zero oil economy. Currently, a lot is going on, on how to remit tax. With the new initiative, tax can now be transferred to the Federal Government

“He (Fowler) said so far, from January to date, about N40billion has been remitted from the states. This is a significant figure from what happened last year. So the states are well notified and they are willing to pay,” Badaru said.

The governor said that the council was hopeful that the indebted states would pay up, adding that there was an improvement in tax remission from states in comparison with that of last year.

“He (Fowler) believes the states have to pay; he came up also with new technique and system that will help automatic collection of taxes–both VAT and withholding tax; I think the states take and are willing to pay their outstanding.”

He said that the governors and the finance commissioners were fully notified on how to boost revenue.

Badaru said that audit was going on in many states on how to reconcile figures between what the states had and what the FIRS had.

According to him, with the initiative, automatically tax will be transmitted to FIRS from the states without delay and without many problems.

The governor added that the second issue discussed was on the capacity of Micro Small and Medium Enterprises (SMEs) to support the economy of the country.

Acording to the News Agency of Nigeria (NAN), Badaru said that “MSMEs contribution to the Gross Domestic Product (GDP) was discussed and as well as their contributions to exports and tax collection.

“This is all in the view of expanding our tax base and revenue generation towards zero oil economy.

“Challenges such as how the governors have to contribute to make MSMEs more active, responsive and more organised so as to pay their taxes and perform well have been discussed.

“The states promised to support the Federal Government because most of the taxes are also coming into the states.’’

He said that from the statistics made available by the National Bureau of Statistics (NBS), in partnership with Small and Medium Enterprises (SMEs) group, there were about 37 million MSMEs making significant contribution to GDP.

Badaru said that if MSMEs were harnessed, they would help the economy greatly and also boost revenue.

He said that NEC was of the view that organs of government saddled with the disbursement and utilisation of tax revenue should be transparent and accountable in order to motivate voluntary tax compliance by the MSMEs.

According to him, government at all levels have agreed to provide infrastructure facilities and enabling business environment to allow MSMEs to thrive.

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