NRS Moves to Address Taxpayers’ Concerns, Says VAT Remains at 7.5%
From Muhammad Kabir Kano
The Nigeria Revenue Service (NRS) has moved to address concerns surrounding Nigeria’s new tax reforms, assuring taxpayers that the standard Value Added Tax (VAT) rate remains at 7.5 per cent.
Speaking during a Nigeria Revenue Service NRS, stakeholders engagement and Tax Reform Sensitization program in Kano with a theme, “Driving Voluntary Tax Compliance Through Tax Reform Awareness”, in Kano, the Tax Administrator in charge of Kano, Jigawa and Katsina States, Samaila Abdullahi, hints that the reforms do not automatically authorise deductions from personal bank accounts.
He said, the concerns raised by individuals, traders, business owners and other stakeholders regarding the implementation of the new tax laws were understandable, particularly questions about bank transactions, loans, family transfers, business income and the possible impact of the reforms on small businesses.
Speaking during an engagement with taxpayers and stakeholders, the Tax Administrator of the NRS, explained that the new tax framework should be understood through the provisions of the law rather than assumptions or misinformation.
According to him, the tax laws do not, by themselves, permit automatic deductions from personal bank accounts, stressing that tax collection and recovery must follow the applicable legal provisions and procedures.
He further clarified that money received as a loan should not automatically be regarded as business income or profit, explaining that proper documentation is essential to distinguish loans from taxable business transactions.
“For instance, when a trader receives a loan of N500,000, the amount should not automatically be treated as N500,000 in sales or profit, provided the transaction is properly documented.”
NRS further addressed concerns about the possible burden of taxation on small businesses, emphasising the importance of providing clear explanations to help taxpayers understand their obligations, applicable reliefs and the records they are expected to maintain.
A speaker who delivered a paper, “overview of Nigeria Tax Reforms and Implications of Tax Payer”, Abba Sani, hints that the Service was committed to improving taxpayer education by providing practical guidance on registration, record-keeping, transaction reconciliation, filing returns, making payments and responding to official correspondence.
He outlined three key areas of focus aimed at improving understanding and compliance with the tax reforms.
The first focuses on explaining the provisions relevant to companies, individuals and businesses, including the applicable VAT rate and other important aspects of the new tax framework.
The second, titled “From Obligation to Voluntary Compliance: A Practical Guide for Taxpayers,” is designed to help taxpayers understand the everyday steps required to meet their tax responsibilities.
The third focuses on “Closing the Compliance Gap: Taxpayer Challenges, Service Delivery and Practical Solutions,” with the aim of identifying difficulties taxpayers face and developing practical measures to address them.
The speaker encouraged taxpayers to report challenges associated with tax registration, digital processes, conflicting explanations and other compliance requirements, noting that their experiences would help the Service identify areas requiring improvement.
The NRS maintained that effective tax administration requires cooperation between the revenue authority and taxpayers, with the Service responsible for providing clear guidance, consistent treatment and accessible support, while taxpayers are expected to provide accurate information, maintain proper records and fulfil their obligations within the stipulated time.
The speaker added that clear procedures and responsive services would strengthen public confidence, promote voluntary compliance and improve understanding of the ongoing tax reforms.
The engagement concluded with a call on taxpayers and stakeholders to ask questions, share their experiences and seek clarification whenever they encounter difficulties in complying with the new tax laws.
