Taiwo Oyedele’s Post

These proposals may modernize Nigeria's VAT system, promote economic growth, and improve the business environment for both large corporations and small enterprises. Collaboration with the private sector and stakeholder input will be essential in finalizing and implementing these reforms effectively.

You should not sniff life out of the poor just for the government to raise revenue. The consequence of every policy should be the guiding principle before policies are implemented. Before you propose an increment in VAT rate, consider the devastating effects of petrol subsidy removal and exchange rate unification on the economy and of course Nigerians. These policies have done more havoc on the lives of the average Nigerian than they met them. Think of the geometric effect of the VAT rate increment on the economy. We are yet to heave a sigh of relief from the above policies. The electricity tariff was also increased, now you are talking about the VAT rate increase. The people are against a completely capitalist economy where the rich get richer and the poor get poorer. Think of a welfare state and make life meaningful for the people. We have only one life to live.

Thank you for sharing these VAT system proposals! I find it very encouraging to see proactive steps being considered to address the challenges in Nigeria. I particularly support the idea of granting full input VAT credit to reduce the burden on businesses. Additionally, exempting basic necessities is a commendable suggestion to safeguard vulnerable groups. However, maximizing revenue also requires tackling tax net inefficiency. Understanding evasion drivers, simplifying tax processes, and strengthening enforcement will encourage wider compliance. I believe that alongside these proposals, it's equally important to address tax net inefficiency which is a bigger hole in the Nigeria tax system.

Final post for 2024; so much happening....a snapshot VAT rates increase [in addition to my earlier post] ·      Tajikistan – Rumors of a rate decrease from 14% to 13% from 1 January 2025. Appears will be from 1 January 2027. ·      Indonesia - Indonesian government deciding to go ahead with the VAT rate increase from 11% to 12% (+1%). DST ·      France - French Prime Minister Michel Barnier's government lost a no-confidence vote in parliament. I think its is not unreasonable to assume that the proposed DST rate increase is off the table for now. ·      Italy - Based on the 2025 Budget law yet to be enacted. The EUR 5.5. million threshold will be eliminated. In addition, for those of Us already in scope of DST, Italy have proposed an advance payment to be paid on November 30 of each calendar year – equal to 30% of the previous year DST. The balance of the DST payment due on May 16.  The Italian Budget Law I understand should be finalized and approved by the end of the year. B2C regimes [EMEA Update] ·      Egypt – December 1, 2024. The API (UIN/TRN validation) is now live following the extension by Minister of Finance for Tax Policies and Reforms, by one month from 1 November 2024. ·      South Africa – It appears the 1 April 2025 amendment applies to non-resident vendors who exclusively supply B2B electronic services i.e. these vendors can deregister and the SA recipient is obliged to self-account for VAT. Businesses who are supplying services both to B2C and B2B customers appear not to be impacted i.e. will continue to operate an all in regime (B2B and B2C – taxable). ·      Zambia - Suggestion VAT registered taxpayers must register for and issue invoices through the Smart Invoice System (local e-invoicing system). We understand that smart invoice system will for now only capture resident taxpayers. ·     Sri Lanka implementing a new VAT regime on digital services 1 April 2025

Muhammad Nami: VAT attribution and derivation: A personal appeal to all parties I have read a ton of views on the proposed Nigeria Tax Administration and other tax reform bills. On one hand, some stakeholders decry the bills as being a contrast to the current administration’s championing for local government autonomy. Some, like the National Economic Council (NEC), last month recommended the withdrawal of the bills, stating that there were too many controversies surrounding it. They called for more inclusion in the stakeholder consultation process. The Northern Governors Forum (NGF) in similar fashion rejected the new derivation-based model for Value Added Tax (VAT) distribution in the bills. On the other hand, some wholly support the bills and believe that their benefits are transformational and necessary. Each stakeholder and commentator holds their view in light of information that is available to them. And that is valid and fair. "The present controversy is based on the VAT sharing formula proposed in Section 77 of the Nigeria Tax Administration Bill. I have come to appreciate that the myriad of criticisms against this well-intended bill may be a result of the lack of clarity or understanding of Section 22 (12) of the Bill, which provides for Attribution of VAT Revenue, requiring companies to file their returns on the basis of derivation by location (place of consumption). "This provision, from my understanding, was included to cure an existing problem with our current VAT administration. As it stands today, in the existing system, VAT returns by companies are not filed on the basis of the place of consumption but reported based on the head office locations of these companies. This means that a whopping 20% of VAT returns are distributed back to states where these head offices are located—whether consumption took place there or not; it explains why Lagos, FCT and Rivers always take the largest chunk of VAT under the current regime." https://lnkd.in/dXNSyQqK

Lao PDR Snapshot The government has advised relevant departments, entities and individuals to implement the revised Value-Added Tax (VAT) rate of 10 percent from the beginning of May. The new VAT rate, which has been increased from 7 percent, aims to support the government’s efforts to enhance state budget revenues and to back the economic and social development of the country. To ensure the implementation of the Presidential Decree No 003, issued on March 19, for the revision of the VAT rate, the Ministry of Finance issued a notification on April 23. The revised VAT rate of 10 percent will cover a wide range of businesses and goods, including imports, general services, and electricity usage. The notification stated that individuals, entities and organisations involved in business operations related to the VAT system need to improve various systems. For example, a point of sale (POS) transaction must be done within this month. In addition, the Ministry of Finance advised the Customs Department to improve the ASYCUDA system and it instructed the Taxation Department to improve the tax revenue management information system (TAXRIS) to ensure that these mechanisms comply with the decision to collect VAT at the newly revised rate of 10 percent. In addition, the Taxation Department in Vientiane and the provincial taxation offices will continue to disseminate the context of documents to build a clear understanding of the VAT regime. They will also have to implement the Presidential Decree No 003 on the revision of the VAT rate. Following the increase in the VAT rate, some local residents have expressed concern about a potential increase in the prices of goods and services, since the prices of consumer goods in various markets are currently high, and the inflation rate continues to fluctuate all the time. The Ministry of Finance said that if there is a need for clarification or information regarding the actual implementation of the newly revised VAT rate, all individuals, entities and organisations can contact the Taxation Department at (021) 243416. Source: Vientiane Times

Having perused the proposal of the Ayodele committee on the VAT. The VAT reforms proposed by Taiwo Oyedele is aim to address inefficiencies in the current system while protecting the vulnerable population and supporting small businesses. Here are the key implications and benefits: 1. Protecting the Poor: Oyedele’s proposal suggests exempting basic consumptions such as food, education, and healthcare from VAT. This would shield the poor from the effects of a VAT increase, ensuring that essential items remain affordable 2. Supporting Small Businesses: The reform intends to increase the VAT exemption threshold for small businesses, reducing their tax burden. Additionally, Oyedele aims to harmonize multiple consumption taxes into a single VAT, which will help streamline the tax system and make it easier for businesses to comply 3. Boosting State Revenues: The proposal includes adjusting the VAT revenue-sharing formula, reducing the federal government's share and increasing that of states and local governments to 90%. This would help empower states financially, allowing them to take more control over local fiscal matters 4. Promoting Exports: By zero-rating VAT on exports of services and intellectual property, the reform encourages non-oil exports, promoting economic diversification 5. Improving Business Cash Flows: Full VAT input credit is part of the proposed reforms, which would allow businesses to claim VAT paid on services and assets. This would ease cash flow challenges and reduce the cost of doing business. Overall, the reforms are designed to protect the most vulnerable, simplify the tax system, and support economic growth while increasing revenue for state governments.

VAT Remains at 7%: Exemptions & Registration Requirements in Thailand The Thai government has extended the reduced 7% VAT rate for another year, continuing the cut that was first introduced in 1999. Despite frequent proposals to raise it to 10%, the government aims to mitigate inflation and boost consumer spending. VAT applies to the import and sale of goods or services. Businesses with annual sales exceeding 1.8 million THB, or those that reach this threshold within 30 days, must obtain a VAT license. Companies offering work permits for foreigners are also required to register. Filing VAT returns is a monthly requirement, due within 15 days of the month’s end. VAT registration should be done after business incorporation. Ensure your landlord provides their house registration details before signing a lease, as it's necessary for registration. Note that revoking VAT registration can be challenging, so confirm that your business is required to register before proceeding. Exemptions include exported goods, unprocessed agricultural products, newspapers, textbooks, cultural services, and religious or charitable activities. Follow Ande Aditya for regular business and inspirational contents Know more about common mistakes about Taxes in Thailand - https://lnkd.in/gE8W_wTR #VATThailand #BusinessInThailand #TaxExemptions #InflationRelief #BusinessGrowth #ThailandEconomy #VATRegistration #TaxUpdates #ThailandBusinessLaws

VAT refunds in Vietnam for companies continue to lag, causing considerable concern for taxpayers. Despite overall tax collections being ahead of target in Vietnam as at the end of Q3 2024, tax authorities continue to apply a prescriptive approach to inspection of VAT refund applications resulting in significant delays and refusals for Vietnamese companies. The cash flow impact is considerable for: - New investors, who may be eligible for refunds during the initial investment phase for projects, resulting in early stage funding constraints, and - Exporters/manufacturers, where delayed refunds increase the underlying product costs and which can make their investment/business less competitive compared to other markets. Businesses continue to seek better outcomes and processes from relevant tax authorities to address this. https://lnkd.in/gjiTMT7R

💭 Are Jaffa cakes biscuits or cakes? 💭 ICAEW is calling for innovative research proposals to simplify the UK's VAT system! 📝✨ Submit your ideas by 30 June 2024 for a chance to win a £5,000 prize and present your findings at the VAT Conference in 2025 at Chartered Accountants’ Hall in London. 🏆📊 The challenge: Reform the UK’s complex VAT system, which has been identified as more burdensome compared to modern VAT systems in countries like Singapore, New Zealand, and Australia. The current system not only hinders effective policymaking but also complicates tax collection and administration. 🏢💼 🔍 Key areas to explore: - Current challenges within the VAT system - Potential impacts of a modernised VAT system on consumer behaviour, economic growth, and fiscal stability - International examples of successful VAT reforms and their applicability to the UK, considering the global landscape and post-Brexit autonomy Ed Saltmarsh, ICAEW Technical Manager, VAT and Customs, highlights the urgency: “The UK has one of the most complex systems of VAT in the developed world, hindering businesses and HMRC, and ultimately impacting taxpayers and consumers. The VAT registration threshold stifles small business growth, while the numerous exemptions and zero rates create uncertainty and can lead to absurd disputes, such as whether poppadoms are crisps or Jaffa cakes are biscuits.” This is a golden opportunity to make a significant impact on the future of the UK’s tax system! 🌍📈 For more details, visit the ICAEW website. Let’s innovate for a simpler, more efficient VAT system! 🚀💡 #VAT #TaxReform #ICAEW #AccountancyNews #TaxNews