Federal Inland Revenue Service ((FIRS) plans to extend Value Added Tax (VAT) to online transactions soon, according to chairman of the agency, Mr. Babatunde Fowler.
He said in New York that banks would be directed to impose VAT on online transactions for purchases of goods and services.
He also said that FIRS generated N1.5 trillion revenue in the first quarter (Q1) of this year which is about 18.7 per cent of the agency’s total revenue target of N8 trillion for 2019.
“Soon, we will ask banks to impose VAT on online transactions for purchases of goods and services,” Fowler said.
“Not that it is something new; it actually should be in existence. We will certainly follow up to make sure that every VAT that is due to be collected is collected.”
He explained that the move was part of measures by FIRS to meet its N8 trillion revenue target for 2019.
Fowler said the agency had started taking action against companies and businesses that refuse to embrace Federal Government’s tax amnesty programme.
According to him, FIRS hopes to generate between N750 billion and N1 trillion from the clampdown, which includes closure of defaulters’ bank accounts.
“We are going after everybody. I am sure you have heard that we have placed lien on some accounts of defaulters that have a billion naira turnover annually. So certainly, we are not leaving anyone out of the tax net,” he said.
On the N1.5 trillion generated in the first quarter of the year, Fowler said it included revenue from non-oil taxes that were 11 per cent higher than FIRS realised from that sector in the first quarter of 2018.
He said the N1.5 trillion revenue is also N330 billion or 28 per cent higher than the N1.17 trillion it made in the corresponding period of 2018.
Fowler said the N8 trillion revenue target described by economy watchers as quite ambitious, was realistic with the cooperation of tax payers, among other factors.
“It is quite realistic as long as we have the cooperation of tax payers in addition to deployment of technology,” he said.
“We have already started the enforcement of over 50,000 accounts that have banking turnover of N1 billion and above that have not filed their returns.”
The FIRS boss also spoke of plans by the agency to surpass the over N1 trillion it realised from Valued Added Tax (VAT) in 2018.
His words: “We will get more people into the tax net and deploy more technology. We have what we call Auto VAT Collect and that basically assists tax payers at the point of transaction, and the VAT portion is sent straight into the federation account.
“So, we know that there is more room for growth in the VAT sector.”
The N8.83 trillion proposed by President Muhammadu Buhari for spending by the Federal Government in 2019 was based on a revenue target of N6.97 trillion.
The expected income consists of oil revenue estimated at N3.73 trillion and non-oil oil projected at N1.39 trillion.
To actualise this, Federal Government in January launched a “Strategic Revenue Growth Plan” to be implemented by FIRS and other revenue generating agencies.
Fowler said all hands were on deck to actualise the plan, adding that everything “seems to be on course.”