The Federal government has commenced the immediate implementation of 7.5 % VAT on delayed payments of government transactions.
The VAT increase which is meant to help government achieve its revenue projections for the 2020 budget is part of the tax reforms included in the 2019 Finance Act.
The new tax increase is expected to generate more revenue to finance key government projects especially in the areas of health, education and critical infrastructure.
The Executive Chairman of the FIRS, Mohammed Nami, who was a guest on a breakfast programme of the Nigerian Television Authority, urged all businesses to ensure that they register with the FIRS for VAT purpose.
Nami said any business that failed to obey the tax law would face the wrath of the tax authorities.
He said: “It’s your statutory responsibility whether you just registered today with Corporate Affairs Commission to come over to the Federal Inland Revenue to register as VAT agent. That is the first responsibility.
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“The second responsibility is that you should keep good record of your transaction because if you don’t keep good records and eventually during the compliance process and monitoring process it is discovered that you have traded well above N25m, the taxes will be paid in arrears.”
The VAT Act exempts pharmaceuticals, educational items, and basic commodities.