VAT Increase: Economy Will Be More Vulnerable, Manufacturers Warn Nigerian Govt

VAT Increase: Economy Will Be More Vulnerable, Manufacturers Warn FG

 

The Manufacturers Association of Nigeria (MAN) has asked the Federal Government to tread with caution in the drive for improved revenue.

The Director-General of MAN, Mr Segun Ajayi-Kadir, said this in a statement on Wednesday while reacting to the plan by the government to increase the Value Added Tax (VAT).

Officials of the Federal Ministry of Finance had defended the Medium-Term Expenditure Framework (MTEF) that VAT be increased by 50 per cent during a presentation in the Senate.

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Ajayi-Kadir, however, said such policy was not ‘manufacturing friendly’, adding that implementing it would have a negative effect as a result of the planned increase in minimum wage.

“As plausible as the recommendation to increase VAT may look, implementing it at this time would boomerang because the timing is inappropriate, especially at a time when the minimum wage of N30,000 was just agreed upon,” he stated.

The MAN DG added, “This could send a wrong signal that the government is not sensitive to the plight of the low- and middle-income earners, who are clearly in the majority. The Nigerian economy will be in a more vulnerable state if VAT is increased.

“No controversy, the burden of the tax would be shifted to the Nigerian consumers that are already struggling, the economy would certainly experience demand crunch, inventory of unsold items would soar, profitability of manufacturing concerns would be negatively impacted, many factories will witness serious downturn or wind down operations.”

Ajayi-Kadiri, therefore, advised the government to widen the tax net rather than increase the rate in order to meet the growing need for more revenue to address the development objective of the country.

He also appealed to the government not to increase the VAT at this time but consider the implementation of the afore-mentioned tax specific recommendations.

The MAN DG asked the government to continue to ramp-up support for the manufacturing sector in the best interest of the people.

PDP Rejects Moves To Increase VAT, Says Buhari’s Administration Is Insensitive

 

The Peoples Democratic Party (PDP) and the party’s Presidential Campaign Organization (PPCO) have rejected the plans by the Federal Government to increase the Value Added Tax on some items in the course of the year

According to the PDP and its campaign organization, the move to increase VAT is anti-people and not in the best interest of Nigerians.

The opposition party said the plan is insensitive on the part of the government.

“President Buhari is aware that the increase in taxes directly results in an increase in the costs of common goods and services on which families depend for survival, yet he is imposing them on the system.

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“It is indeed heartrending that at a time other leaders all over the world are seeking ways to lift burdens off the shoulders of their citizens, President Buhari is rather planning to put more burden on Nigerians, if he is allowed to continue in office beyond May 29” PDP said.

The party also alleged that President Buhari lacks the capacity to harness the nation’s resources to create wealth for the benefit of Nigerians, but “harbours the plan to fleece the people with stringent taxes”.

According to a statement signed by Kola Ologbondiyan, the PPCO spokesman, the PDP claimed that the re-election of President Buhari will “further plunge the nation into hardship”.

It urged Nigerians to vote wisely in the coming elections and ensure that the PDP is voted in, adding that a vote for the opposition will see to a transformation of Nigeria’s economy.

 

FG To Increase VAT – Finance Minister

 

The Minister of Finance, Mrs Zainab Ahmed, says the Federal Government will increase the Value Added Tax on some items in the course of the year.

Some of the items according to her, will include carbonated drinks as well as some luxury items.

She stated this on Wednesday at the launch of the Strategic Revenue Growth Initiative in Abuja, targeted at improving revenue sources for government.

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Ahmed said the move had become imperative as a result of the fiscal challenges the government is confronted with in providing infrastructure for its people.

She, however, noted that the increment will only be done after due consultation with the National Assembly.

“There will be a VAT increase. During the course of 2019, we will have clarity as to which items and what the rate will be and we will have to take a request to the National Assembly for amendment before it takes effect.

“There is also going to be luxury tax.

Already, there is luxury tax imposed on things like jets, yachts and few exceptional items that are classified as luxury and the Chairman FIRS will speak to that but we are contemplating increasing excise duties on carbonated drinks just like we have excise duties now on Tobacco and alcohol.

“But this is going to be a subject of study because we have to identify which ones will be affected and the best way in which to apply the taxes”.

FG Asks States To Remit N41bn VAT To FIRS

FIRS

 

The Federal Government has asked states to remit N41bn Value Added Tax (VAT) to the Federal Inland Revenue Service (FIRS).

The Jigawa State Governor, Badaru Abubakar, disclosed this to journalists on Thursday after the National Economic Council (NEC) meeting in Abuja.

Governor Abubakar said that the council was confident that the states owing will remit to the FIRS.

He said “We had a briefing from the chairman of the FIRS and it dwelt on two aspects of tax issues; one is on the value-added tax(VAT) that is being collected by states.

“He informed the states what their positions are and the outstanding due to the states of about N41 billion”.

Governor Abubakar noted that there was an improvement in tax remission from states in comparison with that of last year.

“So far, from January to date, about N40 billion was remitted from the states, which has a significant increase compared to the what happened last year”, he said.

The Jigawa governor further stated that an audit was going on in many states on how to reconcile figures between what the states had and what the FIRS had.

No Intention To Increase Taxes, Udoma Tells National Assembly

No Intention To Increase Taxes, Udoma Tells National AssemblyThe Federal Government says it does not have any intention of increasing taxes in Nigeria.

The government, however, said it was working towards increasing its internally generated revenue through the broadening of its tax base.

The Minister of Budget and National Planning, Senator Udo Udoma, made this clarification on Monday, while responding to a comment by Senator Ben Bruce, at the public hearing of the Joint Session of the National Assembly on the 2017 Budget.

The minister said “a view has been expressed that we should not increase taxes, that we should broaden tax collection instead. That is precisely what is in the budget”.

No Increase At All In Taxes

Senator Bruce had given the impression that the Federal Government was about to increase taxes, a development he said would further worsen the economic fortunes of individuals and businesses.

Mr Udoma stated that “there is no increase in Value Added Tax (VAT), there is no increase in company’s income tax (and) there is no increase at all in taxes.

“But people who are not paying taxes must be made to pay. So the idea is to increase revenue by broadening the tax base, not by increasing taxes”.

Some economic experts who spoke at the session advocated government spending its way out of recession, partnering the private sector to speed up growth, planning for sustainable development, working with the State governments for integrated development, involving relevant experts, as well as consulting widely in planning, monitoring and evaluation of projects among others.

The Minister told the gathering, which also include Civil Society Organisations and private sector operators, that all the views expressed by the speakers have been captured in the 2017 Budget.

“The concerns that have been expressed are reflected in the budget; the need to spend our way out of recession is reflected in the budget, the need to spend in a way that will attract private sector spending is also reflected in the budget.

“Indeed, the thrust of the budget is to partner with private and development capital to leverage and catalyse resources for growth,” he said.

Achieving Economic Growth

Mr Udoma said the government realised that public resources cannot be enough to drive the development process, which is why the 2017 Budget was directed at catalysing private sector resources and using PPP for a number of projects.

“If you look at housing, we are putting in 100 billion Naira, but we are expecting another 900 billion Naira from the private sector.

“If you look at the EPZ, we are putting in 50 billion Naira, but we are expecting a huge injection of funds from the private sector.

“So, this budget is aimed at achieving economic growth, aimed at achieving diversification, aimed at improving our competitiveness, aimed at improving ease of doing business, aimed at creating more jobs and social inclusion, and aimed at improving governance and security,” he explained.

According to the minister, the spending is targeted at areas that have quick transformative potentials such as infrastructure and agriculture, manufacturing, solid minerals and services among others.

He pointed out that the present government believes in planning, stressing that “when we came in, we came out with a document – the Strategic Implementation Plan for the 2016 Budget of Change.

“We set out short term plans for one year. We started working on a longer term plan for four years 2017 -2020; and that involved extensive consultation”.

Economic Recovery and Growth Plan

Senator Udoma, who touched on partnership with state governments, told the audience that the Federal Government has consulted severally with State governors and with Commissioners of Planning in all the states.

“We are working closely with the States. We even organised a retreat in February 2016 with all the states. In all our initiatives, we are working with the states.

“(Also) on agriculture, we are working with the states; we even have task forces that involve state governors. So, we are working together with the states,” he said in a statement issued by his spokesman, Akpandem James.

The minister spoke further on the Economic Recovery and Growth Plan where he pointed out that the government consulted the private sector extensively.

“Indeed, just last week we met twice with captains of industry and members of the private sector to sit down and expose the plan to them and get their input.

“We are going to council soon and subsequently the plan will be launched before the end of the month,” he said.

Mr Udoma further explained that because government has bold plans which are tailored towards pulling Nigeria out of recession, investors are changing their attitude towards Nigeria.

“People have heard of our plans; they have seen the plan because we have had extensive consultations with our development partners – with the World Bank, with IMF (and) with UNDP.

“They have all been exposed to our plan and we have shown them what we are determined to do (because) that is why people are believing in Nigeria and investing in the Eurobond,” he disclosed.

The Path Of Growth

The minister was emphatic that the government has a clear vision and is on a determined path to get the economy out of recession.

“We are determined thereafter to begin to go back to the path of growth, a more diversified growth, not depending just on crude oil.

“We want to stimulate our manufacturing sector, we want to stimulate agriculture; so we have a coherent, cohesive plan,” he said.

The Minister of State, Mrs Zainab Ahmed, on her part, said government was determined to ensure that Nigerians experience inclusive growth this time around, “which is why we have the social intervention programme.

“The social intervention programme took off fully in October 2016 and all the four components of the SIP have now been rolled out in their first phases and we are scaling up on a monthly basis.” she said.

Mrs Ahmed added that the programme would benefit greatly from the support of the National Assembly, in order to ensure that the benefits were distributed equitably and that no needy citizens were missed out.

FG Says No Plans To Increase Value Added Tax

FG Says No Plans To Increase Value Added TaxThe federal government has been explaining how it will fund the 2017 budget at a session in Abuja.

According to the Minister of Budget and National Planning, Senator Udo Udoma, 11% of government’s projected revenue will come from recoveries of looted funds, which stands at 258 billion.

He said that there are no plans of increasing the value-added tax which is currently at 5%.

Niger State Gov. Presents 108bn Naira Budget For 2017

Niger State Gov. Presents 108bn Naira Budget For 2017The Niger State Governor, Abubakar Sani Bello, has presented 2017 fiscal year budget proposal of over 108 billion Naira to the state House of Assembly for passage.

The budget tagged ‘Budget of Consolidation’ is N22.9 billion and 21.27% more than the 2016 budget.

Governor Bello, while presenting the budget to the members of the state House of Assembly on Friday, said that the proposed budget comprises of a recurrent expenditure of N48,047,960,278 which is 44.45% of the budget and Capital Expenditure of N60,026,337,973 which is 55.55% of the budget size.

The Governor stated that the budget would be generated through Statutory Allocation of N50,695,206,724, Value Added Tax (VAT) of N8,793,474,040, Internally Generated Revenue of N12,403,874,117, Paris Club loan N13,400,000,000 and Capital Receipts of N22,781,770,379.

He further said that the budget would focus on Youth and Women Empowerment as they constitute a large part of the population; completion of projects; enhancement of IGR; re-introduction of teachers’ colleges; transformation of education and development of waterworks.

The Speaker of the state House of Assembly, Rt. Hon Ahmed Marafa, in his remark, said that the lawmakers would ensure the passage of the bill in a shortest possible time and would intensify effort in monitoring the 2017 budget performance so as to provide social amenities to the people in the state.

The Commissioner of Information, Culture and Tourism, Hon Jonathan Vatsa,  while reacting to the budget presented by the Governor to the state House of Assembly, says that the Governor has good intentions for the people of the state focusing on youths and women empowerment and re-introduction of teachers colleges, transformation of education in the state.

Yobe Governor Presents 80.6 bn Naira For 2015 Budget

2015 budgetYobe State Governor, Ibrahim Gaidam, has presented an appropriation bill of 80.6 billion naira to the State Assembly for scrutiny and subsequent passage into law for the 2015 Budget.

The Governor, while presenting the budget to the House, said that the current figure represents decrease of 22.2 billion naira, equivalent to 22 per cent less than that of 2014.

Ibrahim Gaidam said that the reduction in budget size was because of the downward projection from the federation’s account.

Governor Gaidam revealed that 37 billion naira is allocated to capital expenditure, while 43 billion naira is for the recurrent expenditure, a representation of 46% and 54% respectively.

The budget, which would be financed through Internally Generated Revenue, statutory allocation, Value Added Tax, ecological fund and access crude oil, according to him, is aimed at upgrading the performance of infrastructural facilities and identify areas of job creation, among others.

Giving highlights of the 2014 budget, the Governor said that so much was recorded despite the insurgency which claimed several lives in the state. He also condoled with those who lost loved ones, as well as properties during the chain of attacks.

The Speaker of the State House of Assembly, Adamu Dogo, said that the presentation of the appropriation bill by the Governor marked the first reading. He gave an assurance that the House would give the bill speedy deliberations, with a view to achieve immediate passage into law.

The Speaker also praised the leadership style of the Governor, which has made the return of almost all House members ahead of the 2015 election easy.

Taraba State Accountant-General Arraigned For Alleged N1.56 Billion Fraud

Joel-J-Lenbang-BNThe Economic and Financial crimes Commission (EFCC) has arraigned the Taraba State Accountant- General,  Mr Joel Joseph Lenbang, over the diversion of  N1.56 billion Naira  state funds  at the Jalingo Federal High Court  .

The Accountant-General was arraigned on Wednesday before Justice Donatus Nwabueze Okorowo for defrauding the Taraba State Government.

Lenbang, was docked on an 8-count charge, including obtaining false pretence and abuse of office, offences contrary to and punishable under the Advanced Fee Fraud and Other Related Offences Act, 2006

EFCC’s Head, Media and publicity, Wilson Uwujaren confirmed that  Mr. Lenbang allegedly disguised and withdrew monies for sundry payments on behalf of the Ministries, Departments and Agencies (MDAs), as well as payment of Bank Commissions on Turn Over (COT) and Value Added Tax (VAT) which became a monthly affair making a total sum of N1,567,226,557.081 between January 2012 and December 2013.

Although Lenbang pleaded not guilty to the 8-count charge levied against him, the prosecuting counsel, Al Qasim Ja’afar, applied for a date to commence trial but the counsel to the accused filed a motion for bail.

The Judge, Okorowo adjourned the case till July 11, 2014 for hearing and remanded the accused in prison.

Mr Uwajuren said the EFCC swung into action following a petition received from a concerned Taraba State indigene, sometime in February 2014, alleging massive looting of Taraba state funds.

The petition, according to him, triggered investigation of the lifestyle of some of the officers mentioned in the petition and who were believed to be living above their means

Aturu Speaks On Legal Battle Between Lagos Government And Federal Government

law weeklyThe Supreme Court struck out a suit filed by the Lagos State Government challenging the constitutionality of the value added tax, VAT. On this edition of Law Weekly, we trace the development leading to the judgment of the supreme court on the constitutionality of the value added tax and the possible next steps.

On our interview segment, legal practitioner, Bamidele Aturu gave his perspective on what issues should concern the national conference. He also spoke about the war against terrorism which some have said would necessarily claim innocent lives. According to him, “this kind of thinking was dangerous”.

We also drew his attention to the brewing controversy of suspended Rivers CJ.