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  FederalExecutive  Council (EFC) from  5% to 7.5%  has  continued  to  generate  controversies.  Infact  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  controversyis  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