Increase in VAT targeted at high income earners says Don
Dr Ovat Oyama, a lecturer at the University of Calabar says the planned increase in the Value Added Tax (VAT) by the Federal Government from 5 per cent to 7.5 per cent would affect high income earners more in the country.
Oyama, who teaches economics at the University of Calabar, made the assertion during a telephone interview with the News Agency of Nigeria (NAN) in Lagos on Monday.
The economist noted that the increase in VAT which is a consumption tax would affect the elite class more.
“The increase will affect people who purchase commodities from Mega Shops and Luxury Outlets.
“The rise is not expected to affect people who will buy from the open market,’’ he said.
Oyama noted that the federal government is expected to consult with various stakeholders in order to reduce the mistrust, before implementing the VAT increase.
“More consultation is needed among various categories and strata of Nigerians in order to build confidence.
“Nigerians seem to have some trust deficit for the government and only consultations extensively will address this,’’ he said.
He, however, urged government to use the expected increase in revenue towards improving the lives of ordinary Nigerians by providing more social services.
“Government should be seen providing more social investment in order to empower the teeming youths in the country.
“Investment in infrastructure, such as making power supplies uninterrupted will spur businesses,’’ Oyama said.
NAN reports that government had proposed to increase VAT from five per cent to 7.5 per cent.
Mrs Zainab Ahmed, the Minister of Finance, Budget and National Planning, disclosed this while speaking with State House Correspondents after the Federal Executive Council meeting on Sept. 10, in Abuja.
The minister said that the increase will only commence after the VAT Act has been amended by the National Assembly and after consultations with the States and local government councils as well as well as stakeholders in the country.
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