The Presidential Committee on Fiscal Policy and Tax Reforms has proposed a review of states’ and local governments’ share of the Value Added Tax (VAT) revenue to 90 percent.
If the proposal sails through, the federal government’s share would be 10 per cent instead of the previous 15 percent.
The panel also recommended an upward review of the current 7.5 percent rates charged to customers.
Chairman of the committee, Taiwo Oyedele, at a stakeholder’s exposure and impact assessment session to discuss some of the major proposals in the National Tax Policy in Abuja, said the proposals were part of the reforms being introduced to boost the nation’s tax revenue.
Revenue generated from VAT is usually disbursed to the three tiers of government through the Federation Accounts Allocation Committee (FAAC) at a current formula of 15 per cent for the federal government, 50 per cent for states and 35 per cent for local governments.
The government raked in N10.1 trillion from the collection of Value Added Tax (VAT) under former President Muhammadu Buhari.
Oyedele said the nation could potentially double its VAT revenue within two years if the reforms were approved.
He also emphasised that the committee had collaborated closely with business owners to ensure that measures are in place to prevent any escalation in the cost of their products.
