As operators in different sectors of the economy continue to advise the federal government against an upward review of the Value Added Tax (VAT), a Port Harcourt-based oil and gas business magnate, Mr Adamu Mutairu, has said a hike in the VAT will not only be counterproductive, but would further impoverish Nigerians, lead to an increase in the cost of goods and services and intensify inflationary pressure.
In a chat with newsmen, he said it was already bad enough that difficult business climate resulting from election anxiety, insecurity and hostile government policies among others have continued to hamper the growth of businesses.
“For me, it is necessary that any attempt at VAT increment must take into consideration the difficult times in the country’s economy. It is apparent on the need for the Federal Inland Revenue Service to redouble its efforts to ensure that more people are widely captured into the VAT net in order to boost the nation’s revenues. “Obviously, lots of people and corporate entities in the country are not paying VAT following the inability of the FIRS to aptly capture such individuals or corporate entities, furthermore others are paying taxes without VAT due to reduced compliance, ”he said.
He also said increasing VAT was an indirect way of inflicting pains and sending the wrong signals to Nigerians a few days after the re-election of the president.
Adamu, who cited the different reports by the National Bureau of Statistics (NBS) that demonstrated that expansion in the nation was driven more by cost-push factors than interest pull against the outlook of powerless aggregate demand, argued that if VAT is increased without a corresponding decrease in Corporate Income Tax, it would additionally build the cost of goods and services, intensify inflationary anxiety, depress stocks’ price and increase transactions cost in the country.
He urged the federal government to continue to sensitise and encourage Nigerians to cultivate the culture of paying taxes by ensuring fair implementation policy and effective utilisation of resources.
He said there was need for the federal government to take deliberate steps to enhance and expand the Government’s revenue base, but not one that will impoverish the people and pitch them against the government.