Business owners and stakeholders have criticised the the proposed increase in Value Added Tax (VAT) for the 2019 fiscal year by the Federal Government.
The Minister of Finance, Zainab Ahmed had last week, said that there would be an increase in the Value Added Tax in the course of 2019, and that the items affected will be announced later.
She noted that the aim was to harmonise efforts of all the revenue generating agencies in increasing government’s Internally Generated Revenue (IGR).
However, in his reaction, the Chairman, Kwara State Association of National Accountants of Nigeria (ANAN), Deacon, Ishola Moses Abiodun said the timing for an increase in VAT is wrong.
“Presently we have unemployment problem and high inflation in Nigeria. So VAT Increment will lead to increase in the cost of production of goods and services.
“This burden will be bore by the final consumers who will have to pay more for goods and services. This will lower standard of living of the citizens because their purchasing power will reduce. And of course the cost of living will be high,” he explained.
According to him, VAT increment can also lead to reduction in the quality of goods and services.
“Various companies may decide to make up for the VAT paid by reducing the quality of raw materials used for production,” he further said.
He suggested that instead of an increase in VAT, government should block revenue leakage, adding that, “They should encourage VAT payers to pay; prompt remittance of VAT collected must also be ensured.
“We are yet to recover from economic recession. Unnecessary burden should not be put on Nigerians at this crucial time of economic recovery,” he noted.
The former President of Kwara Chambers of Commerce, Industries, Mines and Agriculture (KWACCIMA), Chief Hezekiah Adeniji Oladipo noted that the present economic situation is not favourable to business operators.
” We are waiting to see the outcome of the new policy on VAT. The economic climate is not favourable to business operators because of the high exchange rate coupled with inflation,” he said.
Similarly, the Executive Director of Nigeria Workforce and Strategy Enlightenment Centre (NIWOSEC) , Comrade David Kayode Ehindero pointed out that the VAT is ill conceived.
He said, “I wonder what value is in our products and services when the prices are already on extreme high side. I think it is ill-conceived and anti masses. This is totally unacceptable.”
Also reacting, The Chief Executive Officer of Chidex Superstores in Ilorin, Chief Chinedu Ndunwa said the policy may be aimed at strengthening the economy
“The Federal Government might have a good purpose for the planned increment, perhaps it is aimed at strengthening the economy,” he submitted.
He, therefore called on Nigerians to wait until the policy is implemented before criticising the government over it.
