Stakeholders urge FG to dump VAT increase, reduce cost of governance
The Periscope’s All Professionals After Work Hangout has advised the Federal Government to shelve the planned increase of Value Added Tax (VAT) from the current 5 per cent to 7.5 per cent.
It said instead of increasing VAT, which may place greater burden on ordinary Nigerians, the Federal Government should discard the idea, saying it should rather reduce the cost of governance on an annual basis.
The group stated this at a one-day brainstorming session with the theme, “VAT Increase: A Discourse of Its Impact On The Economy, Production And Inflation in Owerri, Imo State.
In a statement signed by its Executive Director, Anthony Akalugo and Director of Programmes, Victor Iyama, the participants condemned the Federal Government’s move to increase VAT by 7.5 per cent.
“To generate more income for the country and fund the 2020 budget is the chief reason for the VAT increase is neither here nor there and it is born out of insincerity and lack of patriotism as it would have helped to shoot up the nation’s domestic reserve if the high cost of maintaining lawmakers is reduced to a reasonable level.
“It is obvious that the increase in VAT is only an avenue to fund financial recklessness since no suggestive institutional framework has been put in place to plug leakages.
“Cost of governance in every tier of government should be reduced and public service appointments and elections made unattractive and strictly service-oriented to minimise wastes.
“The Presidency should first cut down the cost of governance annually,” the statement reads.
Those who attended the session included media, public relations professionals, medical and pharmaceutical practitioners, cinematographers, photographers, as well as solar energy and generator manufacturers.
Others are, information technology and communication (ICT) solutions experts, business sustainability organisations, business stopgap management organisations, as well as academics.
They resolved that: “Whereas certain clauses within the Finance Bill proposing VAT increase from 5 per cent to 7.5 per cent excludes businesses with annual turnover of below N25m, the timing of VAT increase is inconsistent with current economic realities, as it will frustrate small and medium enterprises (SMEs), which are the major drivers of any economy and further widen the gap between top and bottom rungs of production indices.
“Focus should be directed towards improving the efficiency of the current 5 per cent VAT through effective and efficient auditing of the accounts housing funds generated from VAT.
“Federal Government’s agencies, the key revenue collectors including the Federal Inland Revenue Service (FIRS) and states IGR agencies should be probed with the aim of finding out the extent of remittances of accumulated VAT collected from tax payers over the years. This should also be extended to registered companies and enterprises.
“A political will devoid of corruption will ensure that the Federal Government properly channel accumulated VAT collected within specified time into productive use across the country,” among others.
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