Breaking News

VAT increment will increase Nigerians’ sufferings – Tax experts

Kindly Share This Story:

By Elizabeth Uwandu

Tax experts have called for a stop to the proposed increment of the Value Added Tax (VAT) from five per cent to 7.5 per cent by the federal government, stating that the increase will expose Nigerians to more hardship.

Tax, Anambra, VAT
Work on VAT implementation, not increase,Ex-ANAN president urges FG

This was made known at the Chartered Institute of Taxation of Nigeria (CITN) sensitisation seminar on current issues in Nigerian taxation held in  Lagos recently.

The former Accountant General of the Federation (AGF), Dr. James Kayode Naiyeju, explained that Nigeria economy was not buoyant enough to accommodate VAT increment, “Your growth rate must be in conformity with the buoyancy of the economy. But with what we are having now, there is a problem now, the economy is going not too buoyant and you are increasing VAT. Are you trying to say you are trying to increase the hardship of the citizens? That is a dilemma from the government.”

Police arrest 1,151 high profile suspects in 2 months — IGP Adamu(Opens in a new browser tab)

Rather than the increase taking effect in the year 2020, the former AGF proposed a law to back the commencement date to 2021 for new VAT takeoff, adding that the economy would have grown by then.

Naiyeju, a former president of CITN, who spoke as a moderator at the Chartered Institute of Taxation of Nigeria (CITN), also criticised the collection of the Nigeria Police Trust Fund from corporate organisations’ net profits, describing it as a step in the wrong direction.

He reiterated that the said collection of the fund did not give room for proclaimed accountability, since it did not go through the appropriate channel of budgeting.

The act, proposed to be in force for a six-year period, will require corporate organisations to part with 0.005 per cent of their net profits to fund the training of personnel, procurement of equipment, and instructional materials for police colleges, and boost police welfare.

According to the former CITN chairman, “Whether it is a law, human beings make the law. We will tell the parliament as an institute and we shouldn’t mince words. Because when we begin, very soon, prison will come that they need prison tax fund and other security agencies would come to ask for theirs, and it is going to be on the same corporate companies’ profits.

“Very soon nobody will go for business again because all the profits would have been given to the security agencies.

“When you collect this money you will hand it over to the police. With my expertise, I do not agree with that, it is a step in wrong direction,” Naiyeju said.

Also speaking on the effects of the increase in VAT rate on the economy/stakeholders and issues in Nigeria Police Trust Fund Act, Partner, Deloitte & Touche, Lagos, Yomi Olugbenro,  represented by Ashiata  Agboluaje, said increasing VAT to 7.5%  would have negative impact on Nigerians.

Tax system have been hijacked by political jobbers, others – CITN president(Opens in a new browser tab)

She said with about 20 million people in Nigeria’s tax net and paltry 6.1 per cent tax to gross domestic ratio, one of the lowest globally, she stressed that Nigeria was still a far cry to where it is supposed to be.

According to her, “To make meaningful development as a nation, World Bank says tax to GDP should at least be minimum of 15 per cent. Nigeria is still a far cry to where it is supposed to be.

“Increasing VAT to 7.5%  would have impact on Nigerians, but it would lead to inflation but we will all survive it”, she said.

Earlier in her remarks, president  and chairman of council, CITN, Dame Gladys Olajumoke Simplice, said the seminar fits into the institute’s advocacy efforts targeted at providing professional thoughts and input towards government policies and programmes in such a way that misconceptions are clarified and shades of opinions on the subjects are elicited, collated and forwarded to government  for consideration and to guide future action.


Kindly Share This Story:
All rights reserved. This material and any other digital content on this platform may not be reproduced, published, broadcast, written or distributed in full or in part, without written permission from VANGUARD NEWS.


Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.
Do NOT follow this link or you will be banned from the site!