By Ikeoye Oyetoro
A former Minister of Finance, Chief Anthony Ani, has discouraged moves by the Federal Government to hike Value Added Tax(VAT), saying government should rather retrieve the out-standing N2.5 trillion from local government (LGs) of the country.

Ani, who disclosed this at a public lecture on “Taxation as a tool for economic development,” noted that VAT increase is not the necessary solution to Nigeria’s problem, rather, government should retrieve the outstanding money from all the LGs and also reduce the tax rate so that it will be convenient for every tax payer to pay their taxes.

He added that a lot of money is been pumped into the local government, thus, all LGs are entitle to pay VAT rates.
“It is only 150 LGs that have VAT offices and pay VAT rates in this country while the remaining 600 LGs have no VAT offices, thus, costing the country, at least, N2.5trillion.”

Also speaking at the public lecture held to celebrate his 60th birthday, Mr. Ignatius Mosunmade Adegunle (former Vice President of the Chartered Institute of Taxation of Nigeria), noted that the collection system of VAT  should be improved as 45% of what is supposed to be collected on VAT is not collected.

He advised government to focus more on indirect taxes, saying it is cheaper and easier to operate and if government focuses more on indirect taxes that are related to consumption, there will be more taxes.

He also encouraged other states to emulate the Lagos State and Federal Inland Revenue Service (FIRS) by enlightening tax payers on the significance of tax, what a tax payer is expected to pay on a particular income and who they are supposed to pay to, saying this will reduce the issue of taxation touting and multiple taxation that have been the major concern of tax payers.

Special Adviser to the Governor of Lagos State on Taxation and Revenue, Mr Adeola Rahman Ipaye, noted that tax is the principal tool with which the government raises money for sustenance and to facilitate the delivery of public goods like health, education, roads, bridges, security and various amenities and services which are usually developed, delivered or held in common.

Ipaye stressed that taxes could also serve as a tool for influencing consump- tion patterns as most taxes directly affect the prices of goods and services, which in turn regulate the rate of consumption.

He added that higher import and excise duties on some goods ultimately result in higher retail prices and tend to lower the level demand for such goods and therefore useful for discouraging the consumption of harmful goods.

He, however, discouraged the introduction of new taxes, saying developing countries like Nigeria, with large informal and agro-based sectors, would more successfully increase tax yield by improving administrative efficiency and sanctioning defaulters.