THE LEGALITY OR OTHERWISE OF ENFORCEMENT OF 7.5 PERCENT VALUE ADDED TAX RATE IN NIGERIA: AN APPRAISAL

Abstract

The recent approval of the new Value Added Tax (VAT) rate by the Federal Executive Council (EFC) from 5% to 7.5% has continued to generate controversies. In fact the 2019 Appropriation Bill sent to the National Assembly projected an 11% increase from VAT collections compared to 2018 projections, based on the unauthorized increment in the rate. The driving force for the increment in the rate of Value Added Tax is improved revenue collection by the government. The new rate is expected to take effect from 2020 after due consultations with the relevant stakeholders. The controversy is whether the Federal Executive Council can amend the Value Added Tax Legislation to the exclusion of the National Assembly. This work by doctrinal method analyzed data, facts and reviewed the provisions of the extant tax law. Furthermore, the attitude of the Court and opinions of tax experts on the issue was consulted. The result was that only the National Assembly has the capacity to amend the current VAT Act. It therefore became imperative that due process should be followed in amending the VAT Act.