The Federal Inland Revenue Service has set its sights on a Value Added Tax (VAT) target of N5 trillion in 2024, with plans to address identified tax gaps. This announcement was made by the Chairman of the FIRS, Zacch Adedeji, during a press conference in Abuja.
Adedeji highlighted the consistent increase in VAT revenue over the years, with figures reaching N1.9 trillion, N1.5 trillion, N2.5 trillion, N2.3 trillion, and 3.6 trillion in 2019, 2020, 2021, 2022, and 2023 respectively. The government is also aligning with the Economic Community of West Africa State’s directive on tax reform, specifically Article 30 which allows member states to set VAT rates between 5% and 20%.
The FIRS is aiming for a total revenue of N19.41 trillion in 2024, representing a significant increase from previous years. Plans are underway to pass VAT reform into law, potentially leading to a VAT increase to N5 trillion. The agency is also expanding its VAT collection scope to include non-resident resource suppliers and utilizing collection agents like banks and telecommunication companies.
Collaborating with the United Nations Development Programme, the FIRS is working on VAT gap analysis to further improve tax collection efficiency. The European Union Delegation to Nigeria expressed support for the VAT initiatives, emphasizing the need for improved resource utilization by the government to boost citizen compliance.
The Press Programme for Tax Transactions in West Africa (PATF) aims to enhance tax revenue mobilization in ECOWAS member states. Achievements include the development of regional tax management tools and directives for evaluating tax expenditure and monitoring fiscal transition.
Overall, the focus is on strengthening tax systems, aligning with international standards, and maximizing revenue collection to achieve the ambitious VAT target for 2024.