Accountant urges FIRS to improve VAT collection

A former President of Association of National Accountants of Nigeria (ANAN), Dr. Samuel Nzekwe, has said that there is need for the Federal Inland Revenue Service (FIRS) to device new strategy to increase collectibles accruing to the Federal Government from the Value Added Tax (VAT).

The advice was given against the assessed huge number of unregistered entities that are eligible for VAT compliance in the country, which was put at over 50 per cent.

Nzekwe, who also made the observation in a statement to newsmen in Lagos, said the nation has lost much in revenue to the evaders of VAT, which now calls for attention.

He however, noted that the major problem facing VAT administration in the country is the inability of the FIRS to register all eligible persons.

“What FIRS needs to do is to increase its VAT collection mechanism, so that it could reach out to all that are eligible and ensure that the effect of payment of VAT would be universal.

“FIRS had lagged behind because it would wait until people come to the office looking for government job or tax clearance. The accountant said the problem, as far as VAT is concerned, is how to increase collection of the VAT revenue.

“Few people are registered as VAT agents, while a lot of people are not registered and they are operating in the same environment and selling the same commodities,” the ex-ANAN chief said, adding that the development does bring about fair competition.

Nzekwe however, commended the Federal Government for not yielding to pressure to increase the VAT rate, explaining that the people who bore the burden of VAT were the final consumers of such goods and services.

The accountant said that the falling value of the naira against the dollar in the parallel market was a clear indication of the inflationary effect the devaluation of the naira would bring about.

“If the effect of VAT is added, the rate of inflation will be very high and the common man, particularly those with fixed incomes would suffer so much hardship.

“A steady increase in the price of all goods and services with lack of adequate power, unemployment and basic infrastructure, if VAT is added, would add to the suffering of the people,’’ Nzekwe said.