- FG to Achieve 17% Tax to GDP Ratio by 2023
The Federal Inland Revenue Service (FIRS) has said the service will achieve its target of 17 percent tax to Gross Domestic Product (GDP) ratio by 2023.
The nation’s tax to GDP ratio presently stood at 6 percent, one of the lowest in Africa and the world at large. The Federal Government had raised Value Added Tax from 5 percent to 7.5 percent to up revenue generation and gradually diversify the economy from oil despite weak wages and low economic productivity.
The new FIRS Chairman, Muhammad Nami, disclosed this on Wednesday during a meeting with traders in Lagos.
The chairman said the objective of the meeting with traders was to sensitize them on the 2019 Finance Act mandating Nigerians to pay 7.5 percent VAT.
Nami listed the advantage of the Finance Act to enourage traders’ corporation and genuine participation in the new tax program.
He said the Finance Act will reduce business income tax from the old 30 percent to 20 percent to encourage job creation and enhance economic productivity.
The chairman urged traders to register their business with the service in order to pay the correct tax as mandated by the law.
He also encouraged them to separate their personal capital from business capital in order not to lose their personal fund to state tax.