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.