Senate approves 7.5% VAT hike as proposed in Buhari’s Finance Bill

The  Nigerian Senate on Thursday passed the Finance Bill which seeks to amend seven acts of the National Assembly related to taxes payable in the country.

The bill titled ‘Nigeria Tax And Fiscal Law (Amendment) Bill (Finance Bill) 2019’, sought the increment of the Value Added Tax (VAT) payable by Nigerians from 5 percent to 7.5 percent. Other amended Tax Acts as contained in the finance bill include: Company Income Tax, Personal Income Tax, Custom and Excise Tax, Stamp Duties Act and the Capital Gains Tax.

A majority of Senators expressed their opinions before voting commenced on the Finance Bill.

Senate Majority Leader Yayaha Abdulahi cautioned against partisanship, advising Senators not play politics with the country’s economic crisis.

“When the budget was presented by Mr President, I lead the discussion of the budget; I did not go through the normal process of giving praises, though that was the expectation that was placed on me as the Senate leader,” he said.

I toed the path of honor by noting that the majority problem of the economy is the problem of revenue, and I also noted that the issue of the economy is not what we should play politics with. Playing politics with the present economic crisis that we are faced with is very dangerous. I drew the attention of the chairmen of all the committees of the important role,  irrespective of political platform, that brought us to the Senate. I implore us to look at the issue that we are going to pass today in a very dispassionate and bipartisan way. We are talking about the future of this country.”

Senator Ibikunle, on his part, said that revenue generated from the taxes would be judiciously used, stating that there won’t be any looting. He emphasised that the amendments were necessary in order for the Federal Government to fund its projects.

“If we do not have the necessary wherewithal to fund all of there projects – infrastructure, education, health, power, agriculture – it would amount to nothing. The ammendment to the taxes are not targeted at the downtrodden. I can speak on stamp duty, for instance. We are not getting anything from it and all the various gamut of taxes that exist has been covered. All the money generated from the taxes will not be squandered, neither will it be looted. We can attest that all the monies generated are being judiciously used,” Ibikunle stated.

Senator Ifeanyi Ubah, however, objected to the hikes, saying that an increment in the petroleum tax would increase the pains of Nigerians, arguing that the petroleum industry was not developing.

“Let us be reminded of the motive and agenda of the 9th Senate, which is to create a legislation that works for Nigeria. [With regards to the] the Petroleum Profit Tax Bill, we can understand that petroleum is an important aspect of our livelihood in Nigeria and 60% percent of our revenue in Nigeria is channeled towards importation of petroleum products,” he said.

“The increase in the Petroleum Tax will be so bad for Nigerians because the industry is not growing. 97 % of petroleum imports is being controlled by the NNPC. The increment will add more pains to Nigerians and I want it reviewed,. Let me also note that there was no representative from the oil industry that attended the open debate of the committee.”

Senator Gabriel Suswam cautioned against the VAT increase. The former Governor stressed that Nigerians would be taken by surprise should the Senate goes ahead with the amendment, advising the Federal Government to provide social programmes that would soften the effect of the increase.

“I am concerned with the issue of VAT; some of the amendments in the Value Added Tax, no matter how you look at it, is going to affect all Nigerians. What I suggest is for the Federal Government to create some social safety net that will ameliorate the pains that the people might go through as a result of the increase, because it is coming as a shock to the people and, as their representatives, we have to speak on their behalf,” the Senator said in his objection.

Senator Enyinnaya Abaribe (PDP, Abia South) similarly objected with the VAT hike, saying that “Nigerians are suffering too much already,” arguing that “the rate of tax should be left as it is.”

Senator Abba Moro, in his remarks, stated that there was no justification for an increase in the VAT, stating that ” I understand that the amendments is due to lack of revenue, but the problem is not because we don’t have the revenue but because our revenues are not being properly managed . I don’t think there is any justification of an increase in VAT from 5% to 7.5%. We don’t create problems in attempting to solve a problem. What we need is policy implementation and proper management of our revenue.”

Mewnwhile, Senate President Ahmed Lawan, after the Bill’s passage, said that the amendments were necessary to support the Federal Government to fund the 2020 appropriation budget .

“The Tax amendments would provide additional revenue for the government to provide services and infrastructure to the citizens of this country. What we have done is very significant because this is to ensure that we not only have sources of funding very credible and of course reliable sources of funding for the 2020 appropriation budget, but also for subsequent activities of government. The revenue agencies have to sit up and the National Assembly would be mounting a lot of oversight to the revenue generating agencies to meet their targets,” the Senate President remarked.

THE SUN

Be the first to comment

Leave a Reply

Your email address will not be published.


*