FIRS Received N7 billion VAT from Federal Ministries, Agencies in Two Months

• Data from BudgIT’s platform, GovSpend, shows that FIRS received over N7 billion VAT from MDAs in October and November 2024
• The bulk of this sum is drawn from VAT charged on several construction contracts under the Ministry of Works
• The Tax Reform Bill contains proposals to increase VAT rates from 7.5% to 15%, in staggered phases till 2030

Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.

Federal Ministries, Directorates, and Agencies remitted over N7 billion Value Added Tax (VAT) to the Federal Inland Revenue Service (FIRS) within two months report.

Data gleaned from GovSpend shows that this sum was collected between October and November 2024.

The MDAs remitted N4.13 billion as VAT in October and N2.91 billion in November 2024. As at Monday, January 13, 2025, the data for December 2024 was not yet available.

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This implies that MDAs generated and remitted VAT of N7.04 billion from the third quarter, exclusive December 2024.

Breakdown of VAT received

According to the data from BudgIT’s platform, GovSpend, the Federal Ministry of Works remitted a significant portion of this VAT from contracts for construction companies.

There is N24.98 million VAT remitted for Ultrateam Projects Design & Construction Ltd. and N18.79 million for Bkem Consults Ltd in October 2024.

In November, N97.73 million was remitted as VAT for Gillan Construction Ltd. and N46.67 million for Centrebeam Construction Ltd.

In recent years, the FIRS has focused on widening the tax net and enforcing compliance. VAT is now also collected from oil and gas firms, government agencies, and non-resident companies like Google and Amazon.

The agency is also in several collaborations to close the VAT gap and had set a VAT target of N5 trillion in 2024.

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Ongoing VAT reforms

VAT Collection is a major part of revenue generation in Nigeria, and the Revenue Reform Bills 2024 has several proposals to reform VAT collection in Nigeria.

The FIRS currently receives a VAT rate of 7.5% charged on goods and services sold within Nigeria, except zero-rated categories. It is a consumption tax often passed down in price to the final consumer.

The proposed Tax reforms will double the VAT rate to 15%, in staggered phases of 10%, 12.5% before hitting 15% by 2030.

VAT reforms may be dropped

In related news, Legit.ng reported that the Tax Committee chairman Taiwo Oyedele agreed to drop the proposed VAT reforms if Nigerians do not want it.

Oyedele said in an interview that the VAT reforms had generated so many controversies and aggressive resistance that it suggested Nigerians did not understand what was proposed.

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He explained that contrary to popular opinion, the proposed derivative formula in the VAT reforms would benefit every region of the country.

Oyedele added that even though President Bola Tinubu was insistent on the tax reforms, the specific details, including the VAT reforms, were subject to modifications in the hands of the lawmakers.

Source: Legit.ng