Nigeria’s total revenue can reach N560 billion monthly; an equivalent of N6.7 trillion yearly, if the administration of Value Added Tax (VAT) is decentralised in order to allow states administer tax law, at the five per cent rate, founding President, Association of National Accountants of Nigeria (ANAN), Mr. Omoba Olumuyiwa Sosanya, has 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 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.
Sosonya 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.
He said while South African Revenue Service (SARS) realised R813.8 billion (about N12.5 trillion) in the 2012/2013 fiscal year, Nigeria’s FIRS realised a meagre N861 billion in 2014.
He regretted that while the funding of Britain’s economy depends mainly on revenue generated from taxes and customs duties, the Nigerian experience is that most revenues generated end up into the private pockets of government officials instead of government coffer.