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Tag: VAT

  • Nigeria recorded N1.43tr VAT in Q1

    Nigeria recorded N1.43tr VAT in Q1

    The National Bureau of Statistics (NBS) said the aggregate Value Added Tax (VAT) stood at N1.43 trillion in Q1 2024.

    This is according to the VAT Q1 2024 Report released in Abuja yesterday.

    The report shows a growth rate of 19.21 per cent on a quarter-on-quarter basis from N1.20 trillion recorded in Q4 2023.

    The report also showed that local payments recorded were N663.18 billion, while foreign VAT payments contributed N435.73 billion, while import VAT contributed N332.01 billion in Q1 2024.

    On a quarter-on-quarter basis, the report showed that accommodation and food service activities recorded the highest growth rate at 59.15 per cent, followed by the activities of administrative and support at 47.79 per cent.

    “On the other hand, activities of extraterritorial organisations and bodies had the lowest growth rate at –57.01 per cent, followed by human health and social work activities at –27.73 per cent.”

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    In terms of sectoral contributions, the report showed the top three largest shares in Q1 2024 were manufacturing at 26.72 per cent, information and communication at 17.42 per cent and mining and quarrying activities at 15.42 per cent .

    “On the other hand, activities of households as employers, undifferentiated goods and services-producing activities of households for own use recorded the least share at 0.01 per cent.

    “This was followed by activities of extraterritorial organisations and bodies at 0.03 per cent, and water supply, sewerage, waste management and remediation activities at 0.05 per cent.

    On a year-on-year basis, it showed that VAT collections in Q1 2024, increased by 101.65 per cent from Q1 2023.

  • VAT hits N1.43tr in Q1 2024

    VAT hits N1.43tr in Q1 2024

    The National Bureau of Statistics (NBS) said in the First Quarter of 2024 (Q1 2024), Value Added Tax increased  to N1.43 trillion from the N1.2 trillion recorded in the Third Quarter of 2023 Q4 2023.

    This was contained in its document titled: ” Value Added Tax (VAT) Q1 2024.”

    The document said: “On the aggregate, Value Added Tax (VAT) for Q1 2024 was reported at N1.43 trillion, showing a growth rate of 19.21% on a quarter-on-quarter basis from N1.20 trillion in Q4 2023.”

    The report said local payments recorded were N663.18 billion, Foreign VAT Payments were N435.73 billion, while import VAT contributed N332.01 billion in Q1 2024.

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    NBS said on a quarter-on-quarter basis, accommodation and food service activities recorded the highest growth rate with 59.15%, followed by the activities of administrative and support with 47.79%. On the other hand, it said activities of extraterritorial organizations and bodies had the lowest growth rate with –57.01%, followed by Human health and social work activities with –27.73%.In terms of sectoral  contributions, the report said the top three largest shares in Q1 2024 were manufacturing with 26.72%; Information and Communication with 17.42%; and Mining & Quarrying activities with 15.42%.

    NBS said  nevertheless, activities of households as employers, undifferentiated goods- and services producing activities of households for own use recorded the least share with 0.01%, followed by activities of extraterritorial organizations and bodies with 0.03% and water supply, sewerage, waste management, and remediation activities with 0.05%.

     The report said however, on a year on-year basis, VAT collections in Q1 2024 increased by 101.65% from Q1 2023.

  • VAT revenue hits N948.07b in Q3 2023

    VAT revenue hits N948.07b in Q3 2023

    The National Bureau of Statistics (NBS) yesterday said Value Added Tax on the average was N948.07 billion in the third quarter (Q3 2023).

    This was contained in its Value Added Tax (VAT) for Q3 2023 report, which said there was a growth rate of 21.34% on a quarter- on quarter  basis.

    The report said, “On the aggregate, Value Added Tax (VAT) for Q3 2023 was reported at N948.07 billion, showing a growth rate of 21.34% on a quarter-on-quarter basis from N781.35 billion in Q2 2023.”

    It added that the local payments recorded were N522.08 billion, Foreign VAT Payments were N204.58 billion, while import VAT contributed N221.41 billion in Q3 2023.

    According to the NBS, on a quarter-on-quarter basis, agriculture, forestry and fishing recorded the highest growth rate with 91.87%, followed by the activities of extraterritorial organizations and bodies with 80.25%.

    The report also said on the other hand, real estate had the lowest growth rate with –37.68%, followed by construction with – 9.54%.

    It noted that  in terms of sectoral contributions, the top three largest shares in Q3 2023 were manufacturing with 26.51%; information and communication with 19.04%; and financial & insurance activities with 12.31%.

    The NBS said nevertheless, activities of households as employers, undifferentiated goods- and services-producing activities of households for own use recorded the least share with 0.02%, followed by water supply, sewerage, waste management, and remediation activities with 0.06%; and activities of extraterritorial organizations and bodies with 0.10%.

    NBS also noted that however, on a year-on-year basis, VAT collections in Q3 2023 increased by 51.60% from Q3 2022.

    Similarly, in another report, the Bureau said on the aggregate, Company Income Tax (CIT) for Q3 2023 was reported at N1.75 trillion, indicating a growth rate of 14.27% on a quarter-on-quarter basis from N1.53 trillion in Q2 2023.

    The NBS further noted that  local payments received were N651.63 billion, while Foreign CIT Payment contributed N1.10 trillion in Q3 2023.

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    The data said on a quarter-on-quarter basis education recorded the highest growth rate with 59.60%, followed by public administration and defence, compulsory social security with 57.04%.

    On the other hand, according to the report, activities of households as employers, undifferentiated goods- and services-producing activities of households for own use had the lowest growth rate with –74.34%, followed by Water supply, sewerage, waste management and remediation activities with -73.25%.

    The report reads in part: “In terms of sectoral contributions, the top three largest shares in Q3 2023 were information and communication with 26.18%; manufacturing with 23.90%; and mining and quarrying with 11.86%.

    “Nevertheless, the activities of households as employers, undifferentiated goods- and services-producing activities of households for own use recorded the least share with 0.00%, followed by water supply, sewerage, waste management, and remediation activities with 0.04% and activities of extraterritorial organizations and bodies with 0.10%. However, on a year-on-year basis, CIT collections in Q3 2023 increased by 115.90% from Q3 2022.”

  • VAT hits N948.07b in Q3 2023

    VAT hits N948.07b in Q3 2023

    The National Bureau of Statistics (NBS) yesterday said Value Added Tax on the average was N948.07 billion in the third quarter (Q3 2023).

    This was contained in its Value Added Tax (VAT) for Q3 2023 report, which said there was a growth rate of 21.34% on a quarter- on quarter  basis.

    The report said: “On the aggregate, Value Added Tax (VAT) for Q3 2023 was reported at N948.07 billion, showing a growth rate of 21.34% on a quarter-on-quarter basis from N781.35 billion in Q2 2023.”

    It added that the local payments recorded were N522.08 billion, Foreign VAT Payments were N204.58 billion, while import VAT contributed N221.41 billion in Q3 2023.

    According to NBS, on a quarter-on-quarter basis, agriculture, forestry and fishing recorded the highest growth rate with 91.87%, followed by the activities of extraterritorial organizations and bodies with 80.25%.

    The report also said on the other hand, real estate had the lowest growth rate with –37.68%, followed by construction with – 9.54%.

    It noted that  in terms of sectoral contributions, the top three largest shares in Q3 2023 were manufacturing with 26.51%; information and communication with 19.04%; and financial & insurance activities with 12.31%.

    The NBS said nevertheless, activities of households as employers, undifferentiated goods- and services-producing activities of households for own use recorded the least share with 0.02%, followed by water supply, sewerage, waste management, and remediation activities with 0.06%; and activities of extraterritorial organizations and bodies with 0.10%.

    NBS also noted that however, on a year-on-year basis, VAT collections in Q3 2023 increased by 51.60% from Q3 2022.

    Similarly, in another report, the Bureau said on the aggregate, Company Income Tax (CIT) for Q3 2023 was reported at N1.75 trillion, indicating a growth rate of 14.27% on a quarter-on-quarter basis from N1.53 trillion in Q2 2023.

    NBS further noted that  local payments received were N651.63 billion, while Foreign CIT Payment contributed N1.10 trillion in Q3 2023.

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    The data said on a quarter-on-quarter basis education recorded the highest growth rate with 59.60%, followed by public administration and defence, compulsory social security with 57.04%.

    On the other hand, according to the report, activities of households as employers, undifferentiated goods- and services-producing activities of households for own use had the lowest growth rate with –74.34%, followed by Water supply, sewerage, waste management and remediation activities with -73.25%.

    The report reads in part: “In terms of sectoral contributions, the top three largest shares in Q3 2023 were information and communication with 26.18%; manufacturing with 23.90%; and mining and quarrying with 11.86%.

    “Nevertheless, the activities of households as employers, undifferentiated goods- and services-producing activities of households for own use recorded the least share with 0.00%, followed by water supply, sewerage, waste management, and remediation activities with 0.04% and activities of extraterritorial organizations and bodies with 0.10%.

    “However, on a year-on-year basis, CIT collections in Q3 2023 increased by 115.90% from Q3 2022.”

  • How VAT is frustrating SDGs financing gap, by ATAF

    How VAT is frustrating SDGs financing gap, by ATAF

    African countries have been warned that their Overreliance on Value Added Tax (VAT) as a source of tax revenue is unsustainable and hindering efforts to bridge the $1.6 trillion financing gap in Nigeria and other parts of Africa, tax experts have warned.

    The experts gave the warning at the 2023 Africa Tax Administration Forum (ATAF) Annual Meeting in South Africa.

    Participants, including Nigeria’s Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reform Committee, expressed concern about the financing gap and the declining tax revenues, particularly the heavy dependence on regressive consumption taxes such as VAT.

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    They stressed the need for alternative and sustainable funding sources to meet the Sustainable Development Goals (SDGs) targets by 2030.

    The communiqué released at the end of the meeting highlighted the financing gap in Africa and the critical role of tax revenues in achieving the SDGs by 2030.

  • Diesel: VAT removal to slow inflation

    Diesel: VAT removal to slow inflation

    The suspension of the collection of Value Added Tax (VAT) on Automotive Gas Oil, popularly known as diesel, will moderate prices of goods and services, giving the interconnectedness of diesel to power generation and transportation.

    Economists, financial experts, oil marketers, policy analysts and other stakeholders agreed yesterday that the suspension of the 7.5 per cent VAT on diesel will have positive influence on Nigeria’s inflationary trend. Experts however cautioned that such effect might be moderate.

     The government had in June 2023 began the implementation of the “VAT Modification Order 2021” , which made VAT chargeable on diesel. Before the introduction, diesel sold at N650 per litre, but subsequently rising to over N1, 000 per litre by last month end.

    The suspension of VAT on diesel was part of the Memorandum of Understanding (MoU) between the federal government and the organised labour on Monday, which led to the suspension of the nationwide strike called by the organised labour.

    Managing Director, Arthur Steven Asset Management, Mr Olatunde Amolegbe, said every little measure counts in alleviating the challenges in the economy.

    According to him, while the impact will be very limited given that the VAT is a small portion of the aggregate constituent of the pump price of diesel, industry might see some cost savings over the medium term that they can plough back to production expansion and creating jobs.

    “In this very difficult environment every little help adds up and count for something,” Amolegbe, a former president of Chartered Institute of Stockbrokers (CIS).

    He however called on the government to take additional measures to ease the economic challenges noting that since diesel is not used directly by the poor, the impact of the VAT removal in alleviating poverty might be muted.

    “Much more can and should be down by the government to ease the difficulties citizens are facing but they get some credit for doing this too,” Amolegbe said.

    Managing Director, HighCap Securities, Mr. David Adonri, said the suspension of VAT on diesel would have positive multiplier effects on costs of operations.

    “It’s a relief that will reduce the cost of haulage. It can reduce producer’s distribution expenses and lower production cost. It can moderate inflation,” Adonri said.

    Managing Director, Financial Derivatives Company Limited, Bismarck Rewane, said that the since diesel is a major product for distribution and logistics, it has a direct linkage with inflation and prices of goods and services.

    He, therefore, argued that any drop in the prices of VAT on the commodity will definitely impact positively by the cost of goods and services by narrowing the rural-urban inflation gap.

    Rewane though further noted that aside diesel prices, post-harvest losses muting impact of harvest period, low yield due to low fertiliser usage, insecurity, naira volatility and higher production costs are other key factors contributing to rise in price levels.

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    Chief Executive, Center for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, said the government should be praised for the suspension of VAT diesel.

    According to him, while this is a very difficult period for businesses and citizens, but government itself is in need of revenue to run the country. Therefore, it becomes obvious that government may have realized that no concessions would be too much to mitigate the hardships.

    “The decision to waive VAT on diesel is laudable and responsive.  It will have a moderating effect on diesel price.  This is a policy approach to hardship mitigation. I would in fact suggest that the government should go a step further to waive any other charges or fees on diesel. 

    “This is necessary to effectively drive home the point that the government is sensitive to current challenges of high energy cost. This is a kind of palliative that could have a systemic impact.

    “The government should roll out generous fiscal incentives for current and intending investors in refineries, electricity generation and transportation, because fiscal policy measures are more potent and have systemic impactful palliatives than handouts,” Yusuf said.

    He further advocated that all taxes and import duties on LPG, Solar panels,  inverters and other renewable energy equipment; CNG equipment and accessories should be waived for six months.

    “Economic reforms are not ends in themselves, but means to an end.  It is about economic sustainability and the welfare of the people. I can assure you that such concessions and more that may come from government, would not materially affect government revenue. Therefore loss of revenue should not be a major worry,” said.

    Lending their support for the suspension, the Nigerian Association of Road Transport Owners (NARTO) and the Independent Petroleum Marketers Association of Nigeria (IPMAN), described the removal as a welcome development.

    According to NARTO President, Alhaji Lawal Othman, the suspension will crash the cost of petrol.

    Describing the government as the one with a listening ear, he recalled that the association had been seeking the removal VAT on diesel for a while.

    “It is a very good development. We are very happy that government has heeded to our voice. We appreciate the government’s kind gesture. It will reduce our operational cost.  Naturally, it will reduce the cost of diesel and by extension it will reduce our operational cost,” Othman said.

    National Vice President, Independent Petroleum Marketers Association of Nigeria (IPMAN), Alhaji Abubakar Maigandi, noted that the suspension of the VAT could only have a negligible impact on the pump price of petrol because of the exchange rate challenge.

    “It is a welcome development. But the price may change just a little. That one is just a charge but the naira rate up till now to dollar is very down. But it has an impact, it will reduce the cost a little but not much,” Maigandi said.

    Chairman, Association of Licensed Telecom Operators of Nigeria (ALTON), Gbenga Adebayo, hailed the suspension of VAT on diesel, saying it will do “something” but will not solve the endemic challenges faced by the industry.

    He said VAT in itself is not beneficial to the operators as they merely served as conduit pipes for deduction and payment to the federal government.

    He said the government needed to look inwards for greater relief to the sector, adding that there were bigger issues confronting the sector.

    Adebayo said aside from the high prices of the product which has been threatening the sustainability of the business in the country, its availability is another issue. He added that with or without VAT, the industry remained under the chains of a harsh operating environment.

    “While we commend the government for suspending the VAT on diesel, we hasten to add that it will not have any significant impact on the current asphyxiating operation cost in the telecoms sector, “Adebayo said.

  • ‘VAT hike’ll aggravate unemployment, poverty’

    By Lucas Ajanaku

    The Association of Bureaux De Change Operators (ABCON)  at the weekend warned against the proposed increase in  Value Added Tax (VAT) to 7.2 per cent from five per cent.

    The group insisted that the increase would accentuate unemployment and promote poverty in the country.

    The group gave the warning at a forum it tagged:  ABCON  Quarterly Economic Review for Third  Quarter (Q3). It faulted the move to expand the VAT net  and hike it, arguing that it was a conflicting strategy.

    “The immediate implication is that every Nigerian will either directly or indirectly be affected by the whopping 50 per cent increase in VAT. The average VAT collection in the past six  years is about N900 billion. The revenue is shared 15 per cent to the Federal Government, 50 per cent to states and 35 per cent to LGs net of four per cent cost of collection to Federal Inland Revenue Service (FIRS).

    “But beyond the revenue increase of about 50 per cent, there will be other attendant consequences, such as higher inflation rate, interest rate hike, more unemployment and people will generally become poorer.

    “It will increase the burden on the poor and SMEs contrary to the 2017 National Tax Policy. We also believe that  seeking to expand the VAT net while also increasing VAT rate at the same time is a conflicting strategy.

    “Instead ABCON review is of the opinion that the system can generate twice as much from VAT at current rate by expanding the scope of threshold and ensuring a robust administration rather than by increasing rate. A review of VAT waivers, better policing of the border to improve import VAT collection, framework for VAT on imported services and digital economy.”

    The group also called for a downward review of the cash processing fees introduced by the Central Bank of Nigeria (CBN) under the cashless policy.

    It stressed that though  the objective of the policy is laudable, the cash processing fees will  have severe impact on small businesses across the country.

    “The policy  stipulates three per cent processing fees for withdrawals and two per cent processing fees for lodgments of amounts above N500,000 for individual accounts while corporate accounts would attract five per cent processing fees for withdrawals and three per cent processing fees for lodgments of amounts above N3,000,000.

    “While the objectives of the policy are quite laudable and developmental in nature, a major observation is the consequent effect on small and medium scale business circles in Nigeria where business confidence is still largely low. Because of this,  a good volume of businesses are still largely in cash especially in the rural areas. Thus due to the likely negative effects in this critical segment of the economy,  we have recommended a lower processing fees  of between 0.5per cent to 0.75 per cent and one per cent to 1.25per cent for individual and business account holders.

    “The impact on the general economic performance and compliance to cashless policy would be observed and analysed for further amendments.”

    The group expressed concern over the rising level of the nation’s public debt, calling on the Federal Government to exercise caution and reduction in the public debt.

    In its review of the BDC subsector in Q3, the group urged BDC operators to develop strategies for attracting autonomous foreign exchange as well as for boosting inter-BDC trade  so as to reduce dependence on CBN intervention.

    “As business confidence increases within the BDC sub-sector, traders should improve on strategies to attract autonomous foreign exchange sources as against rigid concentration of CBN intervention funds,” the group said.

  • VAT increase: Looming yellow vests?

    SIR: Nigerian workers always posit that “their take-home pay does not take them home”. Such is the tale of the Nigerian worker – who lives miserly because he earns poorly. The federal government has now remarkably increased workers’ minimum wage.

    The government has hinted that it will increase Value Added Tax (VAT) to fund the new wage. This suggests that government has no sufficient funding for national expenses which spurs certain necessary logical inquires: Given that citizens pay taxes to fund public utility, then, what exactly gulps government’s spending? Has Nigeria maximized revenue potentials and why so, if not? Also, should VAT increase?

    Some countries have revenue problem, some others, have spending problem only. Nigeria has both. Additionally, Nigeria undergoes another third problem of a dangerously accelerating debt profile. Public debt accrues to N24.4trillion, presently. In three years only, external debt soared by $11.77bn at a percentile rate of 114.05 while over 50% of Nigeria’s revenue goes to debt servicing.

    The reality of a nation having to badly survive on borrowed money speaks volume of an ailing economy.

    For a stretched epoch, the dominant source of Nigeria’s revenue has been the crude oil. Once, the country accrued significant revenue through agriculture but the crude oil soon displaced it. Inescapably, need arose to diversify income due to the volatility of oil prices globally.

    Government implemented tax laws and tax reform policies intermittently. VAT was introduced, FIRS launched electronic tax remittance system, recently, government established the Voluntary Assets and Income Declaration Scheme (VAIDS) through which it purposed to generate USD1 billion by waiving criminal prosecution and other penalties for taxpayers who willingly report undeclared income.

    Despite the reforms, nothing really has changed. Tax remittance is yet enmeshed in long-drawn-out procedures, tax laws and tax policies are disjointed and cumbersome, there is low tax education as a result, also; multiplicity of taxes and ultimately, revenue is yet low.

    VAT is charged at 5% presently; a rate which government has argued is low. But given Nigeria’s economic condition, there are no justifications to increase the rate. According to Steve Hanke, Nigeria ranks sixth most miserable country in the world, world poverty clock says more than 91 million Nigerians, close to half of the country’s population, live in extreme poverty and every one minute, six Nigerians become poor. VAT is tax charged on the purchase price of a commodity. With VAT increase, prices of goods and services are bound to soar and such decision would be ill-intended and detrimental.

    The therapy to the dwindling Nigerian economy is for the country to urgently refashion itself to become a competitive producing economy.

    Any nation must solve three basic life problems; what to produce, how to produce and for whom to produce. Need for goods and services cannot end. Nations which meet these needs acquire economic strength. During the period of oil boom, Nigeria garnered massive wealth, because it met the oil demand, even though in crude form.

    Notably, industrialization fuels production because earth-moving vessels will outdo easily, cheaply and quickly too, what a hundred people will do manually. To gain technical know-how into the workings of complex machines and to be able to build new ones, human capital is essential. This is why qualitative education is non-negotiable for Nigerians. Education should be accessible for all and schooling curriculums should tilt towards technical and technological brainstorming. That way, Nigeria’s vast population would become its fortune.

    Taxation can even turn in more. Strategic coalesce of the numerous tax categories would enhance simplified tax procedures and tax education. The law should also fully have a free course against tax evaders.

    Much as Nigeria needs revenue boosting, the country needs to be circumspect with spending; and this is a problem with both government and citizens. Enough of depleting foreign reserve by importing $18 million toothpicks yearly or $400 million tomato pastes or ridiculously continuing to import Pizza from the UK. The country has to drop the inglorious notoriety of running an expensive government at the expense of a meteoric debt profile.

    There is a limit to which any government anywhere in the world may forge ahead with an adverse policy under the guise that implementing such policy is in the best interest of the people. When President Macron of France declared that a climatic policy would inform fuel tax increase, the president’s popularity quickly declined, citizens finding the tax policy unfavorable. In no time, rowdy crowd wearing Yellow Vets littered France in protest.

    Raising VAT to fund wage increase is mixed blessing and whether yellow vests or a yellow card; it will elicit a thumbs down from the Nigerian masses that are already bearing the brunt of economic hardship and need rescue.

     

    • Tope Akinyode, Lagos.

  • Cut NASS salaries; no VAT hike

    What do Senator Ahmed Lawan and Hon. Femi Gbajabiamila, who seek to lead the senate and House of Representatives think about the insultingly high and mostly secret salaries and perks and constituency projects? Will they seek the slashing of same and bring salaries into the salary scale of the federal government e.g. Level 18,19,1 up to 25? This unbridled and nearly blank paycheck is the main embarrassment of our politics in the international community and a serious insult inflicted on the electorate and citizenry by a greed-polluted political class.

    New National Assembly (NASS) members are being shown around. We hope they too are planning less salary and perks? This should be a key plan of this government.

    Some governors are moving around their finishing projects. But is it an avenue for stealing?  If not, it is a pleasant surprise and a credible alternative to the former widespread practice of raiding their treasuries and shutting down business including the business of paying salaries so as to accumulate ‘take away funds’.

    It is always strange when elephants talk to each other, move menacingly, rub tusks or even struggle with each other especially by prox. Last month, it was an ex-president and an incumbent president seeking re-election. This week it is a proxy war. Federal Inland Revenue Service (FIRS)’s BabatundeFowler, promoted from working for one elephant to working at a higher plain for another, who proclaimed that national salvation lies in more taxation and in particular more VAT and its immoral distribution across states which did not pay it. He spoke on behalf of a rejuvenated re-elected government’s interest in yielding to the taxman’s suggestion that VAT should be ‘way up there’ – a misquote! Buhari’s is the bigger elephant and may not like to be advised by two people for the same Southwest to go in two directions.  Is this struggle over the spoils of war, the ruins left by war against the people or in the genuine interest of the people? I believe it is about sharing the future income of the hardest workers with others with less opportunity to work or with less inclination to work or those seeking to benefit from where they did not sow from religious inclination. The sharing formula for VAT has always been an acrimonious unsatisfactory event. The situation will only get worse with increasing VAT.

    I have never been a fan of what I consider to be often draconian tax level introduced in Lagos under Tinubu when he was governor and consolidated by Fashola and taken enthusiastically to an outrageous edge by Ambode before he was reined in by the courts after mass protest. This is because it takes no notice of the Nigerian factors in daily life – substituting for power, transport and health failures, extended family costs and the constant fall in naira value all decimating incomes and the value of that income. Yes, an undisclosed fraction of the tax income was used, mostly without permission of those it was extracted from, outside the state nationwide. For this I believe Lagosians who contributed deserve a rebate, not an increase in VAT! However, Lagos has severely underperformed compared to its multi-billion portfolio of income streams. I have always objected to the huge wasteful cost of reducing the overcrowded three-lane Ikorodu Road to a two-lane road, a bad move, with a multibillion concrete lane divider. And too few buses. Even the federal government has made a similar costly error on the Lagos-Ibadan so-called expressway where the concrete median is duplicated more than doubling the cement costs. Instead that money should have tarred many alternative roads or completed the tarring of the expressway.

    Nobody except Nigeria stimulates an economy or manufacturing sector by increasing taxes. Even the Nigerian government offers tax breaks to foreign investors and even single digit loans. Charity, tax charity, should begin at home. Nigerians are very resourceful substituting for a collapse of infrastructure – power, transport, water and security.  And they have created many jobs not on the tax list – middle man, motor tout, car parking boys, road-way sellers in traffic they sometimes create by digging potholes, the army of okada drivers, shopping-bag carriers in addition to the yahoo-yahoo etc. I agree that VAT should not be increased, more people should be brought on board, and some taxes should be lowered to stimulate growth in the economy. At last the MPR, Monetary Policy Rate, has been reduced to 13.5%. Nigerians have suffered for too long under this CBN/Government punishingly high ‘add-on’ to any loan Nigerians take. This is a shameful and evil burden especially in the light of the huge amounts in multi-billions maliciously stolen by almost anybody willing to steal in and out of government and even legally – illegally by NASS members under the guise of as stupendous salaries and perks and constituency projects, SAPing Nigeria dry. Add to this the late and therefore underperformance of the budget and you have a lot of unaccounted funds. Why add to this more tax funds through an increase in VAT?

    Presumably the 9th Senate will guarantee efficiency and re-institute a January -December budget from January 1, 2020. Hopefully it will cut NASS salaries and perks to upper civil service scale and revert constituency projects to relevant ministries. Only then will Nigerians be convinced that NASS has been rebranded in the national interest and we NASS and Nigeria have a future together.

  • VAT increase will raise misery index, says MAN

    The Manufacturers Association of Nigeria (MAN) has  said any increase in the Value Added Tax (VAT) will be inappropriate.

    Its Director-General Mr. Segun Ajayi-Kadir told The Nation at the weekend that increasing VAT could send a wrong signal that the government was not sensitive to the plight of low and middle-income earners. An upward review of VAT is akin to the government taking back what was given, especially now that the N30, 000 minimum wage has been agreed on, he said.

    The government has denied planning to raise VAT from 5%.

    Ajayi-Kadir insisted that if VAT was increased, the economy will be in a more vulnerable state, as Nigeria’s misery index will go up. He also said given the lopsided income distribution pattern, low per capita income will be affected.

    The MAN chief’s view is that the burden of tax increase will be shifted to consumers who are already experiencing hard times due to low purchasing power. the inventory of unsold items has soared, he noted, reducing the profitability of manufacturing firms, with many factories shutting their operations.

    Ajayi-Kadir also said increasing VAT rate would worsen the already high unemployment rate, which is above 23 per cent.

    He said MAN, as a strategic stakeholder in the development agenda, appreciates the need for the government to generate more revenue to fund its developmental initiatives amidst declining revenue from oil.

    The MAN chief, however, said the government should be caution in the drive for improved revenue, considering that the economy has just exited a recession.

    He argued that the nation’s precarious macro-economic condition requires palliatives that would improve investment and not higher tax burden.

    According to Ajayi-Kadir, the prevailing high lending rate, double digit inflation, low per capita income, and high unemployment rate, among others, are already limiting the economy’s competitiveness.