FG RAKES IN N1.09TN FROM INDIRECT TAXES

The Federal Government received N1.09tn from indirect taxes in the first two quarters of 2022, according to data from the National Bureau of Statistics.

This represents a 10.29 per cent increase from N984.33bn obtained in the first two quarters of 2021. Indirect taxes are calculated based on current basic prices. They are taxes paid to the government by a producer or retailer and later passed on to the consumer. They include value-added taxes, customs or import duties, among others.

These figures were revealed by the NBS in its recent Gross Domestic Product report where it disclosed that the nation’s GDP grew by 3.54 per cent in real terms in the second quarter of 2022. It also stated that aggregate GDP stood at N45.01tn in nominal terms. Figures from the GDP data reveal a steady growth of indirect taxes. The taxes grew from N636.19bn in Q1 and Q2 of 2020 to N984.33bn in the corresponding period of 2021, rising to N1.09tn in the same period of 2022.

With dwindling oil revenues, the Federal Government has made attempts to increase its non-oil revenues, especially tax revenues. In its 2023-2035 Medium Term Expenditure Framework & Fiscal Strategy Paper, the government said, “Revenue generation remains the major fiscal challenge of the Federal Government. The systemic resource mobilisation problem has been compounded by recent economic recessions. Recognising that domestic revenue mobilisation is important for sustainable development, the Federal Government has instituted the Strategic Revenue Growth Initiatives to improve government revenue and entrench fiscal prudence, with emphasis on achieving value for money. These measures include improving the tax administration framework, including tax filing and payment; as well as introduction of new and/or further increases in existing pro-heath taxes like excise on sugar sweetened beverages, tobacco, and alcohol. Mixed reactions have greeted the implementation of these measures.”

The government disclosed that tax rate would remain within the time period, but it anticipated growth in different taxes, taking into account of improvements in the operations of the various tax administrators. It also hopes that consumption expenditure on which VAT could be charged would increase from N53tn in 2023 to N40tn in 2024, and N45tn in 2025.

Read more at: https://punchng.com/fg-rakes-in-n1-09tn-from-indirect-taxes/

 

 

 

 

 

 

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