Special Report: FIRS And The Fight Against Unremitted VAT By MDAs

The introduction of Value Added Tax (VAT) by the government was borne out of the need to increase its revenue base.

This has therefore placed an additional burden on the shoulders of Federal Inland Revenue Service (FIRS) to ensure it properly coordinates all tax matters in Nigeria.

With VAT monies consttuting a substantial part of the country's non oil revenue, the need to properly harness whatsoever accrues to government coffers comes to the fore.

Over the years, issues of partial or non remittance of VAT monies have drawn much attention which has led to moves to amend the VAT Act in order to reduce or put a stop to partial or non remittance by Ministries, Department and Agencies (MDAs),

FrontiersNews investigations has revealed that the Ministry of Works is the Chief Culprit, followed by Agric, Health, Education and Water Resources in that order.



"Most times what they do is that after collecting VAT from their contractors, they refuse to remit same to FIRS and when they are pressed they pay little of what was collected."

According to a FIRS source, FIRS cannot act outside the provision of the law establishing it. "There are penalties prescribed for defaulters in the Act. FIRS will have to adhere to the law. We cannot act outside of what it says."

With a fine as low as N50,000 plus an interest of between 5-10 percent on any unremitted money, it has become imperative, according to financial anlysts for areview of the VAT Act.

The Bill before the National Assembly to amend some aspect of the VAT Act would stengthen the sanction mechanism against defalters. "And until it comes out, there is nothing we (FIRS) can do."

Meanwhile only recently, the Revenue Mobilisation and Fiscal Allocations Committee (RMAFC) inaugurated a committee to audit remittances of VAT by Banks to the Federation accounts.

Except there are stiffer sanctions for MDAs who deliberately refuse to partially or outrightly remit VAT collected, they will continue to treat the remittances of VAT with levity, thereby denying government the much needed revenue for development.