BANKS’ VAT COLLECTION IN NIGERIA: THE AFTER EFFECTS OF FINANCE ACT 2019
Yahaya Yusuf; Umar Makama & Jibril Ali Zangina
Banks in Nigeria thrive on their ability to generate income through their lending activities and fees based transactions. This paper examined the link between the finance Act 2019 and Banks VAT collection in Nigeria. Documentary method was used in sourcing the data for the impact analysis from the annual reports and accounts of DMBs, CBN bulletin and FIRS circulars. A census of 27 DMBs in Nigeria was used. The study concludes that the Finance Act would stimulate economic activities , provide the long overdue clarity on hitherto controversial tax issues and create an opportunity for raising the much-needed tax revenue in a more efficient and equitable manner that encourages economic growth and development. However there are contemporary challenges to VAT collection drive due to parallel and shadow banking activities along side with traditional banking in Nigeria. This poses threats to banks drives and by extension their VAT collection and remittance; this claim is hinged on the fact that it is only when fees based transactions (VATable) are consummated or provided by DMBs that VAT charges are generated and remitted accordingly. The study suggests that banks shall intensify efforts in mobilizing the huge deposits in the hands of unbanked people and also with support from regulatory authorities come up with effective strategy to checkmate the impact of parallel services so that more of VATable services are provided by the Banks which will further translate into more Revenue to the banks and by extension to the Government.