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[b]WHAT DO YOU KNOW ABOUT VAT(VALUE ADDED TAX) PAYMENT?
I could still remember then in school when I first came in contact with the topic: VALUE ADDED TAX which can be abbreviated to VAT. One would have think it is just as simple as getting your VAT input and output, then working on the different, which may amount to VAT payment or VAT refund.

Never knew that if you are still planning on pursuing the job role of an accountant in any organisation you may find yourself, VAT calculation and payment are a force to reckon with.
What is VAT (Value Added Tax)?

VAT refers to a Federal government Tax which is managed by the Federal Inland Revenue Service (FIRS).

VAT is a consumption tax payable on the goods and service consumed by any person, whether government agencies, business organizations or individuals.

It is a Tax charged on most taxable goods and services provides in Nigeria and also on goods imported into Nigeria.
VAT is calculated at a flat rate of 5% on the cost of goods and services in Nigeria. Furthermore, VAT serves as an indirect tax wherein the burden of the payment is borne by the final consumer of the goods and services. The tax was created by the VAT Act No. 102 of 1993 which became effective from January, 1994.

[img][/img]Till date most companies providing services or dealing with sales of Vatable goods and services have refused to either remit nor filed VAT at the FIRS office stationed nationwide in the 36 states of the federation, hence brought the need for tax officer to shut down business as a result of defaulting tax payment.

Some even employed professional services to help reduce the amount of VAT due to FIRS, but what most companies forgot is that same rate charged for consumption tax in state are what is charged for VAT payment.

Uptill date, the VAT has proven to be a strong source of revenue to the government. Consequently, few attempts had been made to push up the rate to about 10% but were rebuked by the public resentment against the proposed rate.

Some people who are not aware of how the VAT revenue are distributed are bewildered with questions on how this revenue is judiciously expended, well I must say All proceeds of VAT flow into the VAT pool account, then they are distributed monthly to the Federal, States (including Federal Capital Territory) and Local governments in the proportion of 15%, 50% and 35% respectively (with consideration for derivation principle).
It is this same money that is used for most capital and infrastructural expenditure.


to learn more on Value Added Tax
visit the following link..

http://www.accountantsconnect.com.ng/courses/principles-of-taxation/lessons/value-added-tax/

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