The Federal Government, yesterday, defended its decision to increase Value Added Tax (VAT), rate to 7.5 per cent from five per cent, stating that the review should have been done nine years ago.
Addressing newsmen after the conclusion of the 25th Nigerian Economic Summit in Abuja, Director-General of the Budget Office, Mr. Ben Akabueze, disclosed that prior to 2010, the plan was to effect an increase in VAT rate and a reduction in Personal Income Tax, while he noted that personal income tax was increased by the government in office at that time, while it failed to effect an increase in VAT.
He maintained that Nigeria’s VAT rate was one of the lowest in the world, while he noted that the poor would not be affected by the increase, as most of them normally have minimal engagements with goods, services and platforms where VAT are charged.
The DG further explained that the Federal Government had expanded the VAT exemption list and is ensuring that only businesses with turnover of N25million and above charge VAT, thereby, exempting majority of the micro and small businesses.
Akabueze also declared that the planned increased would not be favourable to the Federal Government but to the states, as the VAT Act mandates that 85 per cent of VAT collected should be disbursed to sub-national governments, which according to him, are presently struggling.
He said, “The issue of increasing the VAT rate is a matter that has been long settled, about the necessity to increase it and about the necessity to improve on taxation and to do so through consumption. About nine years ago, that was supposed to happen. There were two things that were supposed to happen simultaneously — an increase in the VAT rate from five to ten per cent and reduction in personal income tax. One happened, while the person who was supposed to make the other one happen chickened out.
“We now face down the road, taking into account the prevailing circumstances, the increase has not gone as far as 10 per cent. The Economic Recovery and Growth Plan (ERGP), stated very clearly that the VAT rate would be raised. At 7.5 per cent, Nigeria’s VAT is still one of the lowest.
“Another important thing to note is VAT is a consumption tax. The truth is the generality of the poor and vulnerable Nigerians that people have been shouting about that the increase would impact adversely, really have very minimal engagement with VAT because they hardly consume the things or engage with the platforms where VAT is chargeable.
“In proposing the increase, two things had happened, the proposal include an expansion of the exemption list. The VAT Act has an Exemption List, the one that exempts certain basic commodities, food, medicine and education, but we have expanded that even to cover as much as possible, the things that the poor consumes.
“The other thing that has changed, the existing VAT Act has no threshold for applicability, which means technically speaking, even the woman on the roadside is supposed to charge VAT.
Obasanjo, Abdulsalami, Sultan, Others Brainstorm On Insecurity
Rising insecurity and agitations for secession by different ethnic groups across Nigeria has attracted the attention of elder statesmen and other national leaders to a meeting in Abuja.
The meeting was organised by Interfaith Initiatives for Peace jointly led by the Sultan of Sokoto, Muhammad Sa’ad Abubakar, and Emeritus Cardinal John Onaiyekan, and the National Peace Committee chaired by Gen Abdulsalami Abubakar (rtd).
Reporters were barred from taking part in the closed-door meeting, expected to proffer solutions to the ongoing security challenges threatening the peace and unity of the country.
It was also an exploratory meeting on pressing issues of national unity, security, peace, integration, economic revitalisation and development, women and youth welfare and general progress.
Former President Olusegun Obasanjo; former Head of State, General Abdulsalam Abubakar (rtd); Sultan of Sokoto, Muhammad Sa’ad Abubakar; Ooni of Ife, Oba Adeyeye Enitan Ogunwusi; Tor Tiv, Prof Ortese Iorzua James Ayatse, Emeritus Cardinal John Onaiyekan; President General (Ohanaeze Ndigbo), Prof George Obiozor; and Afenifere leader, Ayo Adebanjo; were all in attendance.
Others sighted at the meeting are President of Nigeria Labour Congress (NLC), Comrade Ayuba Wabba; CAN General Secretary, Joseph Daramola; JAMB Registrar, Prof Ishaq Oloyede; Etsu Nupe, Yahya Abubakar; former Minister of Agriculture, Chief Audu Ogbe, among several political and traditional rulers at the meeting.
Elder statesmen, Chief Edwin Clark, also attended the event at the Congress Hall of Transcorp Hilton Hotel, Abuja, but could not participate in the meeting because he could not climb the staircase to the meeting room.
Fighting Corruption Difficult In Democratic Setting, Buhari Laments
President Muhammadu Buhari says fighting corruption in democratic setting is a difficult task to accomplish.
The president disclosed this during an interview with Arise Television which was televised, yesterday.
According to him, the war against corruption has not been easy for him since he became a democratically elected president six years ago.
He, however, stressed that his administration had succeeded in easing out corrupt public officials without making noise about it.
Buhari recalled that much was achieved in the fight against corruption when he was military Head of State in the early 80s “when a lot of people were sent to prisons before I was also booted out”.
The president frowned at the way and manner local government system was being managed, saying the local government administration was almost non-existent in the country.
He cited situation where state governors continued to starve the local governments of funds saying “in a situation where N300million is allocated to local government and they are given N100million is not fair”.
On activities of bandits and kidnappers particularly in the North-West and North-Central zones, Buhari said he had given the police and Armed Forces the instructions to be ruthless with bandits and vandals terrorising innocent citizens across the country.
He stated that he had told the security agencies to treat bandits and other criminals in the “the language they understand.
“Problem in the north-west; you have people over there stealing each other’s cattle and burning each other’s villages.
“Like I said, we are going to treat them in the language they understand.
“We have given the police and the military the power to be ruthless. You watch it in a few weeks’ time there will be difference.
”Because we told them if we keep people away from their farm, we are going to starve. And the government can’t control the public.
“If you allow hunger, the government is going to be in trouble and we don’t want to be in trouble.
“We are already in enough trouble. So, we warn them sooner than later you’ll see the difference,’’ he said.
On farmers/herders clashes, the president said the problem had persisted because old cattle routes and grazing areas had been violated by development, adding that those who had taken over such traditional arrangements would be dispossessed.
On the fight against insurgency, Buhari dismissed the assertion that majority of Boko Haram members were foreigners.
According to him, the majority of the Boko Haram members are Nigerians, saying this was further corroborated by Borno State Governor, Prof Babagana Zulum.
The president stated that his administration had done a lot to fight the terrorists and insurgents but the problem in the “North-East is very difficult.”
Igboho Declares June 12 Day Of Protest, Warns Buhari
Sunday Adeyemo, popularly known as Sunday Igboho, has declared June 12 as day of protest for Yoruba nation agitators.
The self-acclaimed Yoruba activist said the agitators will hold ‘peaceful rallies’ across the South-West region on Saturday, June 12.
Igboho, who spoke through his spokesman, Olayomi Koiki, in a live video programme aired, last Wednesday night, called on South-West governors to cooperate with the peaceful protesters during the exercise.
He warned the President Muhammadu Buhari-led administration not to attack the agitators.
He said, “Let us warn the Federal Government that if there is bloodshed this weekend, the international community is watching, if the military kills any Nigerian this weekend, it is going to be very hot.
“The Yoruba nation rally will go ahead in every part of Yoruba land and the rest of the country where it will hold.
“Red alarm will begin on Friday. People should stock up food Items from Friday night.
“We are not backing down this weekend; we are ready to take back what belongs to us.”
He also enjoined agitators to ‘fast’ on Friday.
This is coming after NANS under the leadership of its National President, Comrade Sunday Asefon, had declared June 12 as National Day of peaceful protest to call on the government to act decisively towards addressing insecurity.
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