The proposed increase of the Value-Added Tax (VAT) rate from 5
to 7.5 per cent by the federal government is subject to the review
and approval of the National Assembly, the Minister of Finance,
Budget and National Planning, Zainab Ahmed, has said.
Also, the minister clarified that the increment will be to 7.5
per cent and not 7.2 per cent she announced on Wednesday at the end
of the meeting of the Executive Council of the Federation in
Abuja.
The minister said in a statement on Friday by her spokesperson,
Yunus Abdullahi, that the proposed increase followed the
recommendation of the presidential technical advisory
committee.
Mr Abdulahi said early this year the federal government
constituted the committee comprising competent and leading
economists from both the public and private sectors chaired by the
Lagos-based Economist and Managing Director/ Chief Executive
Officer of Financial Derivatives Company Limited, Bismack
Rewane.
The committee, inaugurated on January 9 this year, was mandated
to profer advice on ways to realise alternative sources of raising
funds for the implementation of the new minimum wage by the
government.
The committee submitted its report on March 21 with the increase
in the VAT rate from 5 per cent to 7.5 per cent as one of its key
recommendations to government to handle the issue.
The committee based its recommendation on the observation that
the prevailing VAT rate in Nigeria was still about half the African
average and amongst the lowest in the world.
Also, the committee said the benefit of an increase in the VAT
rate will be more beneficial to state governments and local
government areas, many of which are already facing difficult fiscal
conditions.
About 85 per cent of the revenue collections expected from the
VAT rate increase will go to the subnational governments.
“The proposed increase is subject to legislative intervention by
the National Assembly who will have to amend the Revenue Act to
reflect the proposed increase,” the minister said.
“The existing VAT Act exempts the basic necessities such as
food, medicines and education, which therefore minimises the impact
on the poor and vulnerable segments of the Nigerian society from
the burden thereof.
It is expected that the exemptions will be maintained in the
amended Act.
“The VAT increase, if correctly implemented, could bring in huge
revenues, which would actually reduce the fiscal deficit burden,”
the minister added.
She said the government’s borrowing programme could then
ease.
She said the policy will reduce the financial burden of the
states and local governments, to allow them focus on issues like
poverty reduction, healthcare and power generation and
transmission.
Experts speak
On Tuesday, while announcing the draft 2020-2022 Medium Term
Expenditure Framework, the minister said the proposed 2020 budget
of about N9.79 trillion total projected expenditure includes fiscal
deficit component of about N2.1 trillion.
The minister said the deficit will be covered with new
borrowings by government from foreign and domestic loans as well as
other sources.
On its part, the Centre for Social Justice (CSJ) on Thursday
said it supports the proposed increase in the VAT.
The Lead Director of CENSOJ, Eze Onyekpere, said the increment
will help increase resources available for budget implementation
and other development purposes across the three tiers of
government.
Nigeria’s tax to gross domestic product (GDP) ratio, Mr
Onyekpere said, remained one of the lowest in the world, the
county’s VAT rate is one of the lowest in the West African
sub-region.
From the group’s 2018 and 2019 federal government budget
analysis, the CENSOJ had recommended for an increase in VAT as one
the ways to shore up government revenue.
“The way forward is to ensure that all persons liable to VAT,
collect and remit the same to the appropriate authorities.
“While we take note of the arguments about the harsh economic
conditions and how the increase will impose hardship on the poor,
we note that all Nigerians ought to make sacrifices considering
Nigeria’s parlous fiscal condition,” Mr Onyekpere said.
Caution
Regardless, there are groups urging caution in the implementation
of the policy to avoid exacerbating poverty and increase inequality
among the people.
The Tax Justice and Governance Platform (TJGP) Nigeria said the
federal government must design and implement policies and
programmes that will enhance the welfare of the poor, protect
disadvantaged groups and address the inequalities in the
sociey.
The group consists of Christian Aid
Action Aid Nigeria, Centre for Democracy and Development, Civil
Society Legislative Advocacy Centre CISLAC), OXFAM Nigeria, and the
Imo State Tax Justice and Governance Platform.
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Bello Audu Abuja Kaduna
Kidnapper
I’ve killed 10 People, rustled 100,000 cows,
Abuja-Kaduna kidnapper confesses
A notorious kidnapper, who specializes in abducting innocent
travellers along the dangerous Abuja-Kaduna Expressway, Bello Audu,
has confessed to have so far killed about 10 people since he began
his illicit kidnapping business, last year.
He also disclosed that he and other bandits have rustled about
100,000 cattle in various communities since he relocated to Niger
State from Kajuru, a popular town in Kaduna State.
Audu, 42, made the revelations while been quizzed by a detective
of the Police Intelligence Response Team (IRT).
In the video footage exclusively obtained by PRNigeria[1], the 42-year old
criminal said he and others, have participated in about 50
kidnapping operations, using AK-47 riffle, among other dangerous
ammunition.
Audu, who added that they collected N3 million each for six of
their abducted victims, said: “We once collected N10, N16, N17, N19
and N20 million, among other amounts for other victims too.”
He further disclosed that their ammunition supplier sells an
AK-47 riffle to them for either N600,000, or N650,000, and
sometimes even N700,000.
“I don’t buy magazines in pieces. I usually order for a
container of magazines, which contains about 900 rounds. And a
round of magazine is sold to us for just N1000,” he said.
The middle-aged kidnapper, who said he has two wives and five
children, noted that he always resort to killing some of his
victims if their relatives refuse to cooperate and quickly pay
ransom for them.
“I may be forced to just eliminate or shot persons I kidnapped
if their relatives speak to me rudely while negotiating for their
ransom,” he said.
The notorious bandit, while revealing that his fellow kidnappers
have several hideouts in Rijana community, along Abuja-Kaduna
highway, said he regretted adopting kidnapping as a source of
livelihood.
Audu, promised to cooperate with the Police to mop up his
weapons, and also fish out other kidnappers and bandits in the two
affected States.