“FG is expecting to rake in N29.3bn as charges from electronic money transfers”
*Jerks up expected VAT revenue by 99% to N316bn
*Targets N29.3bn from electronic money transfer
Amidst ongoing controversy over its rights to collection of Value Added Tax, VAT, across the country, the Federal Government is set to implement an aggressive VAT revenue drive which it expects to yield about N316 billion next year.
This forms part of the 2022 fiscal policy plan which is also reflected in the Appropriation Act presented previous week to the National Assembly by the executive arm of the government.
Under the aggressive tax revenue drive, the FG is also expecting to rake in N29.3 billion as charges from electronic money transfers, a new revenue line it hopes to implement in 2022.
The targeted VAT revenue for 2022 is 99.2 percent higher than N158.95 billion budgeted in 2021 and represents 3.12 percent contribution to the total targeted N10.13 trillion government’s revenue for the year.
Recall that the FG had in 2020 introduced various consumption taxes and increased the VAT rate to 7.5 percent from five percent in a bid to raise its revenue in the face of falling oil prices.
Currently, the FG is locked in a legal battle with the Rivers and Lagos state governments as some other states threaten to join the battle to take over VAT collection in their respective states from the FG.
Besides raising the expected VAT revenue for 2022, the government also raised its target from other tax heads under the non-oil revenue tax, which include the Company Income Tax (CIT), customs revenue and the federation account levies, leading to 59.3 percent increase in the 2022 non-oil revenue (N2.132trn) budget when compared to N992.63 trillion budgeted this year.
Customs revenue was increased by 146.2 percent to N834.12 billion from N338.85 billion, while the federation account levies was increased by 78.41 percent to N71.97 billion from N40.34 billion budgeted in 2021.
While the FGN share of oil revenues was N754.2 billion, representing 56.3 percent performance of the prorated sum of N1.34 trillion in the 2021 budget, non-oil tax revenues totalled N1.15 trillion, 15.7 percent higher than the targeted sum.
CIT and VAT collections at N547.54 billion and N235.77 billion, were 20.5 percent and 48.3 percent increase respectively over their respective targets for the period.
However, custom revenue and federation account levies are so far 0.1 percent and 34.6 percent lower than N338.85 billion and N40.34 billion in the 2021 budget respectively as at the end of August.
