Nigerians have been reacting to the new increment of the Value Added Tax (VAT) which was raised by the Federal Executive Council, FEC, yesterday.
The Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed, disclosed that the council approved a proposed increase of VAT from 5% to 7.2%.
However, the Minister stated that the VAT Act would have to be amended by the National Assembly. The amendment would have to be effected first before the increase comes into effect.
Ahmed explained that it is important because the federal government only retains 15 per cent of the VAT; while 85% is for the states and local government.
But the states need additional revenue to be able to meet the obligations of the minimum wage.
Nigerians react to new move by FG
However, the question in the minds of Nigerians especially entrepreneurs, business owners and individuals is, if the new VAT Act would bring stability in the economy of the country.
A social entrepreneur, Suzzy Arobs said, “This is ridiculous. We are struggling to pay the current VAT of 5%, how do they expect us to pay such amount? They are making business difficult for medium and small size business owners like myself.”
Dumebi Okpara is a businessman who is into automobiles. He lamented that the government should consider startups in any policy decision such as this.
“We are not seeing the impact of the tax we have been paying, so why the increase? Would this new rate stabilize the economy of the country? Why should we pay more and get less? It is going to affect businesses, profits and the economy as a whole,” he noted.
Collaborating the previous contributors, Tobi Oluwafemi stressed that the reason for the increment is not worth it.
“If the federal government is taking steps to increase the VAT because of the payment of minimum wage, why such decision? Why would they increase the wage of workers and then later increase the VAT rate? It shouldn’t be so.
A business analyst, Mr. Frank Omodeji also analysed the situation.
He said that in as much as the new policy has been raised, there are pros and cons to the act. “But, I would advise Nigerians to be patient until it is reviewed and probably approved by the National Assembly.”
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