Controversy over 7.2 per cent VAT rate
MIXED reactions on Thursday trailed the 7.2 per cent Value Added Tax proposed by the Federal Executive Council .According to the institute, the proposal will help government to realise its developmental objectives.The association said the step will spur spontaneous increase in price of goods and services.
According to the CITN boss, the VAT review should take place every five years, stressing that it should be tax on consumption. Simplice advised tax payers to form pressure groups to monitor tax revenue spending and ensure accountability on the part of government. Speaking on tax reforms at the Fiscal Monitor Session of the event, IMF Assistant Director, Fiscal Affairs Department, Cathy Pattillo, said tax reform in Nigeria was important.
MAN Director-General Segun Ajayi-Kadir said in a statement that the increase could send a wrong signal that the government was not sensitive to the plight of the low- and middle-income earners, who are in the majority. Ajayi-Kadir said: “The prevailing high lending rate, double digit inflation, low per capita income, high unemployment rate and a low 1.91 per cent growth rate amidst 2.6 per cent population growth rate that are already cumulatively limiting competitiveness could be further worsened.”
He advised the government to widen the tax net rather than increase the rate to meet the growing need for more revenue to address the development objective of the country. ”President Buhari ought to be aware that an increase in VAT will worsen our decrepit economy and put more pressure on families and business as it will result in increase in costs of goods and services that have direct bearing on the welfare of the people.
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