Business
FIRS Boss Tasks Taxpayers On VAT Funds
The Acting Chairman, Federal Inland Revenue Service (FIRS), Mr Kabir Mashi, has urged tax payers to monitor the use of revenue from Value Added Tax (VAT) for social development.
Mashi gave the advice in Abuja while declaring open an enlightenment campaign organised by VAT Revenue Agency on goods and services in the country.
He said VAT accounted for 16 per cent of total tax collection in the last eight years.
He said, Nigeria’s VAT, which is 5 per cent levy on goods and services, increased from 163.3 billion in 2004 to 659.1 billion in 2011, stressing that “Overall, it has been the third highest contributor to tax collection in the last eight years behind petroleum profits tax and companies income tax.’’
He, however, described the over 400 per cent increase in VAT collection as still very inadequate, adding that there was significant room for increase.
Mashi said 85 per cent of VAT collected by FIRS was allocated to the states, while15 per cent was given to the Federal Government during the monthly Federation Accounts Allocation Committee (FAAC) meeting.
During a question and answer session, the officials of the revenue agency were specifically asked to assess whether the revenue from VAT was meeting the purpose for social development.
Responding, Mashi said “it is the duty of tax payers to demand what is being done with their money.
Saying that “On monthly basis, VAT collected is published through FAAC, what the state government and local governments do with the money, I cannot explain.’’
Mashi recalled that during the military era, deductions from VAT, were usually referred to as “VAT money’’ for specific development projects.
He said that the practice had since been discontinued but stressed that tax payers were duty bound to find out “what their VAT money was being used for.’’
Earlier, Mr Onyekachi Ihedioha, Coordinating Director, Direct Report Group, FIRS, said Nigeria was in the process of reviewing its VAT law.
Ihedioha said the Nigeria VAT law had yet to attain its peak when compared with the UK VAT law, which boasted of 3,200 pages in its Tax Legislation Handbook.
The director listed some tax exempted goods in the country as medical and pharmaceutical products, basic food items, book and educational materials and baby foods.
He listed agricultural equipment and exported goods as other tax exempted goods.
The facility will be disbursed through participating Microfinance Institutions (MFIs), which will in turn extend the loans to their customers, particularly SMEs, as they directly interface with businesses at the grassroots level.
The Executive Director of COMCIN, Mr. Micheal Ogbaa who represented the Chairman, Dr. Iredele Oyedele (FCA, FCCA), said the initiative is designed to strengthen micro-lending institutions and expand access to finance for grassroots entrepreneurs, particularly women and youths in the informal sector.
Ogbaa explained that COMCIN does not lend directly to individuals but works through its network of microfinance and cooperative institutions, which in turn provide loans to end users.
“We came together to advocate for the microfinance ecosystem. Commercial banks often exclude people at the grassroots, but our members are positioned to reach them. This facility will empower them to do more,” he said.
He noted that the loan scheme offers low interest rates and flexible repayment plans, making it more accessible to small business owners.
According to him, about 90 percent of beneficiaries are expected to be women, who play a key role in sustaining families and driving economic activities at the local level.
“Our focus is on traders, service providers, and players in the informal sector. These are the real movers of the economy. By supporting them, we are strengthening families and contributing to national development,” he added.
Ogbaa disclosed that eligible SMEs with proven integrity and business track records could access up to N5 million each through participating micro-lending institutions. The rollout has commenced in Lagos and will extend to Abuja, Enugu, and other regions, including the South-West, South-East, and North-East.
He said 12 micro-lending institutions have already benefited from the scheme, while 85 applications are currently being processed under the pilot phase.
“Our target is to reach at least 100,000 SMEs nationwide. We are building a platform that connects funding partners with credible micro-lending institutions, creating a reliable channel for financial inclusion,” Ogbaa said.
He added that COMCIN is also working to attract larger funding pools from development finance institutions and private investors, noting that successful implementation of the pilot phase would boost confidence and unlock more capital for SMEs.
“We have seen encouraging testimonies from early beneficiaries. As we demonstrate transparency and efficiency, more institutions will be willing to channel funds through us,” he said.
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