The Federal Government has said it hopes to fund part of its projected N12.6 trillion 2021 budget with an expected N1.7 trillion from Value Added Tax (VAT).
The federal government said, would be achieved by bringing more people into the tax net with the effective implementation of the provisions of the Finance Act 2019 and improving collection efficiency. According to the 2021– 2023 Medium Term Expenditure Framework (MTEF) sumption, taking into account ‘vatable’ items and collection efficiency. Budget of 2021.
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Aggregate consumption in the country is estimated at N118.89 trillion in 2021 from N117.91 trillion estimated for 2020.
“The VAT projections over the medium-term are based on holding the rate at 7.5 percent.
“Wider coverage and improved collection efficiency will be achieved through continuous nationwide VAT registration and monitoring, as well as the use of technology for auto-collect platforms in more sectors of the economy.
Besides, the solution to deduct and remit VAT and WHT from state government contract payments is to be deployed to all the 36 states.
