S/N

Paragraph of Bill

Related Sections
Cap-V1    
LFN 2004

Subject Matter of Cap-V1 LFN 2004

Remarks

Recommen- dations

1

3

13

4

First Schedule

“The tax shall be computed at the rate of 10 per cent on the value of all goods and services as determined under sections 5 and 6 of this Act, except that goods and services listed under Part III of the First Schedule to this Act shall be taxed at zero rate”.

….(b) by inserting a new Part III as follows-
       “PART III
Zero rate goods and services

An increase of 100% will fuel inflation and put pressure on the consumers.

Zero rate is for those producing for exports. Exemption is more appropriate for items 2 and 3 in Part III.

i.  The tax should remain at 5%

ii  Items 2 and 3 should be deleted from Part III and added to the first schedule.

  2

   5

13B

“Companies operating in the oil and gas sector shall deduct VAT at source and remit to the nearest tax office”
     

There are inherent dangers in equating companies in the oil & gas sector with parastatals

This proposed new section should be deleted

  3

  6

14(A)

“(1) A taxable person who makes a taxable supply shall, in respect of that supply, furnish the purchaser with a tax invoice containing, inter alia, the following, that is –

(2)” Tax invoice shall be issued on supply whether or not payment is made at the time of supply”

There should be consistency in the usage of terms.

Substitute the word  “Tax payers” with “taxable person” in section 14(A) (1).

   4

    9

    19

“Section 19 of the principal Act is amended in subsection (1) therefore by substituting for the figure “16” the figure “15”.

There is no need for the amendment, the correct section dealing with remittance of tax is S.16

Amendment not necessary

  5

   10

   20

Section 20 of the principal Act is amended by substituting for subsections (2) and (3), the following new subsections –
“(2) A taxable person who is aggrieved by an assessment made on the person may appeal to the Federal Inland Revenue Service.
(3) Appeal from Federal Inland Revenue Service may be made to the VAT Tribunal.

Appeal cannot be made to the federal Inland Revenue Service where the assessment in dispute emanated from.

Substitute the word ‘object” for “appeal” in S.20 (2)

Amend S.20 (3) by substituting the following new subsection- “A taxable person who is dissatisfied with the decision of he Federal Inland Revenue Service may appeal to the VAT tribunal.”

  6

  14

2nd Schedule

The Second Schedule of the Principal Act is amended in sub-paragraph (2) of paragraph 23 thereof by substituting therefore, the following new sub-paragraph, that is
 “(2) Notwithstanding that an appeal is pending, 50 per cent of the disputed amount of tax shall be paid within one month of the decision of the Tribunal”.

The word “disputed” in the context is creating an ambiguity as it does not create an impression of fair hearing.

Substitute the word, “determined”  for the word, “disputed”.

S/N

Paragraph  of Bill

Related
Sections Cap-V1    
LFN 2004

Subject Matter of Cap-V1 LFN 2004

Remarks

Recommen- dations

1

Subsidiary  Legislation

VAT tribunal rules should be part of VAT law as a subsidiary legislation.

2

8(1)

“A taxable person shall, within six months of the commencement of this Act or within six months of the commencement of business whichever is earlier, register with the Board for the purpose of the tax.

VAT is not chargeable unless a taxable person carries on trade or business and the six months after the Act started operation is no longer relevant. The Act has been made since 1993. Registration six months after the Act started operation is no longer relevant.

Substituting “A taxable person shall within six months of the commencement of business register with the Board for the purpose of the tax” for the existing section 8(1)

3

15(1) & (2)

There is a need to ensure consistency with the amendment in section 12.

The word “him” should be substituted with the word “person”.