The Federal Inland Revenue Service (FIRS) has unveiled its plan to increase the value added tax from the 5 per cent currently to 10 per cent.
According to the Acting chairman of the FIRS, Mr. Sunday Ogungbesan who disclosed this during an interactive session with journalists in Lagos at the weekend aslo added that the agency may soon clamp down on recalcitrant companies.
He said the FIRS is consulting with relevant agencies on the need to up the vat in view of the falling oil prices, which has adversely affected the economy.
Ogungbesan hinted that of about 450, 000 corporate entities in the country, only about 125,000 pay taxes to government coffers. one of the greatest challenge facing the FIRS is that most companies that evade taxes are briefcase concerns that cannot be traced he said.
He explained that the FIRS resorted to engagement to get tax defaulters to change their minds by paying their taxes as at when due.
The FIRS boss said the agency tried different options in the past to enforce compliance, including the option of sealing companies that evade taxes, but discovered that it adversely affected man hour, the Gross Domestic Product and the economy as a whole.
He maintained that he will continue with the option of engagement rather than clamp down on defaulters, pointing out that the former is already yielding results.
Do you think it is right for FIRS to introduse the new VAT tarriff ?
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