Business News
VAT Not Administered at Sub-National Level Anywhere in the World – FIRS
By Tony Obiechina, Abu
The Federal Inland Revenue Service (FIRS) on Wednesday insisted that it has the sole responsibility to collect and administer Value Added Tax (VAT) in the country.
Addressing journalists in Abuja, the Group Lead, Special Operations Group, FIRS, Mathew Gbonjubola, said there is nowhere in the world where the administration of VAT is done at the sub-national level.
A Federal High Court sitting in Port Harcourt, Rivers State, had on Monday dismissed an application by the FIRS, seeking to stop the state government from commencing collection of VAT in the state.
Following the court ruling, Governor Nyesom Wike directed the Rivers State Revenue Service, to immediately commence collection of VAT, from corporate bodies and businesses in the state threatening to shut down any concern that fails to comply.
Speaking on the development, Gbonjubola said the that contrary to misconceptions in some quarters, the FIRS administers VAT on behalf of the three tiers of governnment and not for the Federal Government alone.
He said the decision of the Federal High Court to grant powers to states to administer Value Added Tax will make it difficult for businesses to operate under the new dispensation.
According to him, the revenue from VAT is administered under an arrangement that allows the Federal Government to collect 15 per cent, States 50 per cent and Local Government 35 per cent.
He said by implication the State and Local Government take about 85 per cent of VAT proceeds leaving the Federal government with only 15 percent.
“The VAT is not paid to the Federation Account but to VAT pool account for distribution to the three tiers of governnment. It is after the sharing that the portion of the Federal Government is paid to the Consolidated Revenue Fund Account.
“VAT works only at a national level but not at a sub-national level. There is no country in the world where VAT works at the sub-national level”, he said.
According to him, the VAT Act differentiates between two kinds of VAT; Input VAT and Output VAT, pointing out thatthe input VAT is the tax paid to suppliers on the purchase of taxable goods and services, while output VAT is the tax received from customers on the value of taxable goods and services sold or rendered.
Gbonjubola stated that the VAT Act allows taxpayers to offset their input VAT (Allowable Input VAT) against their output VAT, to the extent that such input VAT only relates to such goods that are purchased or imported for resale or form the taxpayers’ stock-in-trade used for the production of new products on which output VAT will be charged.
He explained that the output VAT exceeds the recoverable input VAT, while the taxpayer is expected to remit the excess to the FIRS.
In the instance where the input VAT exceeds the output VAT, he further explained that the taxpayer will be entitled to a refund of the excess after following the due process as contained in the FIRS Establishment Act.
But with the decision of some states to go ahead with the implementation of the Court Judgement, he said that such refund may not be possible because the administration of VAT will be done by different states tax authorities.
He attended the media chat with the Group Lead, Digital and Innovation Support Group, FIRS, Mrs Chiaka Ben-Obi.
He said, “The VAT is not paid to the Federation Account but to VAT pool account for distribution to the three tiers of governnment. It is after the sharing that the portion of the Federal Government is paid to the Consolidated Revenue Fund Account.
“VAT works only at a national level but not at a sub-national level. There is no country in the world where VAT works at the sub-national level.”
He said the VAT Act differentiates between two kinds of VAT; Input VAT and Output VAT.
Put simply, he said the input VAT is the tax paid to suppliers on the purchase of taxable goods and services, while output VAT is the tax received from customers on the value of taxable goods and services sold or rendered.
According to Gbonjubola, the VAT Act allows taxpayers to offset their input VAT (Allowable Input VAT) against their output VAT, to the extent that such input VAT only relates to such goods that are purchased or imported for resale or form the taxpayers’ stock-in-trade used for the production of new products on which output VAT will be charged.
He said where the output VAT exceeds the recoverable input VAT, the taxpayer is expected to remit the excess to the FIRS.
In the instance where the input VAT exceeds the output VAT, he explained that taxpayer will be entitled to a refund of the excess after following the due process as contained in the FIRS Establishment Act.
But with the decision of some states to go ahead with the implementation of the Court Judgement, he said that such refund may not be possible because the administration of VAT will be done by different states tax authorities.
His word, “The VAT bill of 1993 which was a federal law and came into effect in 1994 and according to the law established in the VAT, the FIRS is the legitimate authority to administer. The VAT law abrogated all sales tax as at the time it was enacted and upon the advent of the current democratic dispensation.
“The VAT decree became an act of the NASS and remain so until now. VAT is administered on behalf of the federation and not on behalf of the federal government and by that I mean that VAT is administered on behalf of the three tiers of the government we half in Nigeria. The 774 local governments, the 36 states and the FCT and the federal government of Nigeria.
“The revenue arising from VAT is shared amongst the 3tiers of government base of extra provisions and currently 35% goes to the local government, 50% goes to the state government while 15% goes to the federal government and so in actual effect the 85% of VAT collected goes to state and local government while only 15% goes to the federal government. The VAT revenue is not paid into the federation account at inception, it goes into a VAT pool account.
” It is only after the sharing and allocation that the portion that falls to the federal government goes to the relevant cost delegated revenue account. As to the incidence of VAT, VAT is practiced on an input-output mechanism. What it means is for a business either importing or buying products for …… that business will pay VAT either at the port if its importing or to the manufacturer if it is buying from a local manufacturer and when that business pay VAT it is accounted for that business as an input tax such that when it began to sell in any part of Nigeria and charges VAT to its own customers, it is able to recoup the input tax paid either at the port if it is an imported item or paid to the manufacturer if it is an item bought locally and it works only at a national level”.
By Tony Obiechina, Abuja
The Budget Office of the Federation has reaffirmed the integrity of Nigeria’s newly enacted Tax Reform Acts, cautioning against what it described as governance by speculation and unverified claims following allegations of post-passage alterations.
In a statement on Wednesday, the Budget Office said it had taken note of concerns raised by the Minority Caucus of the House of Representatives, stressing that the sanctity of the law is central to constitutional democracy and not a mere procedural formality.
According to the Office, any suggestion that a law could be altered after debate, passage, authentication, and presidential assent without due process would strike at the core of the Republic and undermine citizens’ right to be governed by transparent and stable laws.
However, it warned that democratic integrity is also endangered by the careless amplification of unverified claims. “A nation cannot be governed by insinuation or sustained on circulating documents of uncertain origin,” the statement noted, adding that public confidence, once shaken by speculation, is often difficult to restore.
The Budget Office emphasized that both government and citizens share a common interest in truth, clarity, and due process, noting that public finance depends heavily on trust in the legality and clarity of fiscal laws. It welcomed the decision of the National Assembly to investigate the allegations, describing institutional inquiry, not conjecture as the appropriate response to claims of illegality.
On public access to the law, the Office agreed that Nigerians and the business community are entitled to clear and authoritative texts of all laws they are required to obey. It clarified, however, that the authenticity of legislation is determined by certified legislative records and official publication processes, not by informal or viral reproductions.
The statement also underscored the importance of separation of powers, warning that claims suggesting Nigeria is being governed by “fake laws,” if not backed by established facts, risk eroding confidence in democratic institutions.
At the same time, it stressed that legislative scrutiny should not be dismissed by the executive, noting that oversight is a constitutional duty, not an act of hostility.
From a fiscal perspective, the Budget Office said legal certainty is essential for revenue projections, macroeconomic stability, budget credibility, and investor confidence. While it is not the custodian of legislative records, it maintained that uncertainty around operative tax provisions directly affects economic planning.
To restore confidence, the Office proposed a set of measures, including the publication of verified reference texts in a single public repository, orderly access to Certified True Copies for stakeholders, clear public explanations where discrepancies are alleged, and strict alignment of all implementing regulations with authenticated legal texts.
Addressing calls for suspension of the tax reforms, the Budget Office cautioned against allowing prudence to slide into paralysis. It argued that properly implemented tax reform is necessary to reduce dependence on borrowing and inflationary financing, while easing indirect burdens on vulnerable citizens.
“Where clarification is required, it must be provided; where correction is required, it must be effected; where investigation is required, it must proceed,” the statement said, adding that governance and reform should not be stalled by unresolved conjecture.
The Office concluded by describing taxation as a democratic covenant that binds citizens and the state, insisting that compliance depends on transparency and trust. It called on political actors to protect institutions as much as positions, urging citizens and businesses to rely on verified sources and resist the spread of unauthenticated information.
The statement was signed by Tanimu Yakubu, Director-General of the Budget Office of the Federation, who reaffirmed the agency’s commitment to fiscal transparency, institutional integrity, and reforms that advance national prosperity while safeguarding citizens’ rights.
By Jennifer Enuma, Abuja
President Bola Tinubu has congratulated Alhaji Aliko Dangote, the President of Dangote Group, on his appointment to the World Bank’s Private Sector Investment Lab, a body tasked with promoting investment and job creation in emerging economies.
In a statement by Special Adviser on Media and Publicity, Bayo Onanauga, the President described the appointment as apt, given Dangote’s rich private sector experience, strategic investments, and many employment opportunities created through his Dangote Group.
The Dangote Group became one of Africa’s leading conglomerates through innovation and continuous investment.
Dangote Group’s business interests span cement, fertiliser, salt, sugar, oil, and gas. However, the $20 billion Dangote Petroleum Refinery and Petrochemicals remains Africa’s most daring project and most significant single private investment.
“President Tinubu urges Dangote to bring to bear on the World Bank appointment his transformative ideas and initiatives to impact the emerging markets across the world fully” the statement said.
The World Bank announced Dangote’s appointment on Wednesday, as part of a broader expansion of its Private Sector Investment Lab. The lab now enters a new phase aimed at scaling up solutions to attract private capital and create jobs in the developing world.
The CEO of Bayer AG, Bill Anderson, the Chair of Bharti Enterprises, Sunil Bharti Mittal, and the President and CEO of Hyatt Hotels Corporation, Mark Hoplamazian, are on the Private Sector Investment Lab with Dangote.
The World Bank said the expanded membership brings together business leaders with proven track records in generating employment in developing economies, supporting the Bank’s focus on job creation as a central pillar of global development.
By Joel Oladele, Abuja
The Nigeria Customs Service (NSC) has generated an impressive N1,751,502,252,298.05 in revenue during the first quarter of 2025.
The Comptroller-General (CG) of the Service, Bashir Adeniyi, disclosed this yesterday, during a press briefing in Abuja.
According to Adeniyi, the achievement not only surpasses the quarterly target but also marks a substantial increase compared to the same period last year, reflecting the effectiveness of recent reforms and the dedication of customs officers across the nation.
“This first quarter of 2025 has seen our officers working tirelessly at borders and ports across the nation.
I’m proud to report we’ve made real progress on multiple fronts—from increasing revenue collections to intercepting dangerous shipments,” Adeniyi stated.He attributed this success to the reforms initiated under President Bola Tinubu’s administration and the guidance of the Honourable Minister of Finance and Coordinating Minister of the Economy, Olawale Edun.
The CG noted that the revenue collection for Q1 2025 exceeded the quarterly benchmark of N1,645,000,000,000.00 by N106.5 billion, achieving 106.47% of the target. This performance represents a remarkable 29.96% increase compared to the N1,347,705,251,658.31 collected in Q1 2024.
Adeniyi highlighted the month-by-month growth, noting that January’s collection of N647,880,245,243.67 surpassed its target by 18.12%, while February and March also showed positive trends.
“I’m pleased to report the Service’s revenue collection for Q1 2025 totaled N1,751,502,252,298.05.
“Against our annual target of N6,580,000,000,000.00, the first quarter’s proportional benchmark stood at N1,645,000,000,000.00. I’m proud to announce we’ve exceeded this target by N106.5 billion, achieving 106.47% of our quarterly projection. This outstanding performance represents a substantial 29.96% increase compared to the same period in 2024, where we collected N1,347,705,251,658.31.
“Our month-by-month analysis reveals even more encouraging details of this growth trajectory,” Adeniyi said.
In addition to revenue collection, Adeniyi said the NCS maintained robust anti-smuggling operations, recording 298 seizures with a total Duty Paid Value (DPV) of ₦7,698,557,347.67.
He stated that rice was the most seized commodity, with 135,474 bags intercepted, followed by petroleum products and narcotics.
“From rice to wildlife, these seizures show our targeted approach,” Adeniyi remarked, noting the NCS’s commitment to combating smuggling and protecting national revenue.
Adeniyi also highlighted key initiatives, including the expansion of the B’Odogwu customs clearance platform and the launch of the Authorized Economic Operators Programme, which aims to streamline processes for compliant businesses. The NCS’s Corporate Social Responsibility Programme, “Customs Cares,” was also launched, focusing on education, health, and environmental sustainability.
Despite these achievements, the CG noted that the NCS faced challenges, including exchange rate volatility and non-compliance issues. Adeniyi acknowledged the need for ongoing adaptation and collaboration with stakeholders to address these challenges effectively.
Looking ahead, the NCS aims to continue its modernization efforts and enhance service delivery, ensuring that it remains a critical institution in Nigeria’s economic and security landscape.
“Results speak louder than plans; faster clearances through B’Odogwu, trusted traders in the AEO program, and measurable food price relief from our exemptions. We’ll keep scaling what works,” he concluded.
 |
Senator Abba Moro: It is Time to Go Home
ShareBy Cleopas Agada For seven years in the National Assembly, what has Benue South actually felt? For a man who...
NCDs Fastest-growing Disease Burden in Nigeria — Pate
ShareThe Coordinating Minister of Health and Social Welfare, Prof. Muhammad Pate, said Non-Communicable Diseases (NCDs) have become one of the...
2027: Adeleke Inaugurates Aare Asejere’s Campaign Council
ShareFrom Ayinde Akintade, Osogbo The Governor of Osun State, Senator Ademola Adeleke, yesterday charged newly inaugurated members of the Osun...
INEC Seeks Stakeholders’ Collaboration for Credible, Peaceful Elections
ShareThe Independent National Electoral Commission (INEC) has reaffirmed its commitment to strengthen collaboration with the National Orientation Agency (NOA), security...
Reps Reject Child Marriage, Demand Protection of Girl Child
ShareBy Ubong Ukpong, Abuja The House of Representatives on Thursday unanimously called for urgent and coordinated actions to protect Nigerian...
Court Awards N125, 000 Cost against Odumodublvck
ShareAn Abuja High Court on Wednesday awarded N125, 000 against a rapper, Tochukwu Ojogwu, popularly known as “Odumodublvck”, for asking...
Hunger Changed My Mind, Timini Egbuson on Embracing YouTube movies
ShareNollywood actor Timini Egbuson has reflected on his changing perception of YouTube movies, joking that he might have struggled financially...
Peller Announces Livestream with Peter Obi
SharePopular Nigerian TikTok streamer, Hamzat Adelaja, popularly known as Peller, has announced an upcoming livestream with the presidential candidate of...
Nigeria’s inflation drops from 15.39 Per Cent to 14.63 Per Cent in September
ShareBy Tony Obiechina, Abuja The National Bureau of Statistics (NBS) on Thursday disclosed that Nigeria’s inflation has eased from 15.39...
Senate Oders Investigation into Corps Member’s Death in Enugu
ShareBy Tambaya Julius, AbujaThe Senate has ordered an investigation into the death of a National Youth Service Corps (NYSC) member,...