Former Vice President Atiku Abubakar has condemned plans by the federal government to increase Value Added Tax, saying it will worsen the cost of living crisis amongst Nigerians.
In a statement released on his X handle on Sunday, September 8, Atiku described the plan as a “blazing inferno that will consume the very essence of our people.”
His statement reads;
“President Bola Tinubu, alongside his coterie of advisers, has resolved to raise the VAT rate from 7.5% to 10%, even as the NNPCL has announced a soaring PMS price increase at the pump. This move unveils a new era of regressive and punitive policies, and its impact is destined to deepen the domestic cost-of-living crisis and exacerbate Nigeria’s already fragile economic growth.
President Tinubu and his entourage seem to be resorting to their familiar tactic: heaping burdens upon the impoverished while steadfastly ignoring their extravagant excesses! Tinubu’s actions reflect a profound insensitivity to the plight of the less fortunate as he indulges in the opulent renovation of villas and the acquisition of new jets and vehicles for himself and his family. One need not be an economist to grasp the ominous implications of President Tinubu’s ill-conceived policies for Nigeria’s future. The relentless rise in taxes and interest rates has proven excessively onerous, debilitating businesses of all sizes and leading to job losses while intensifying the suffering of the poor.
The manufacturing sector, in particular, has endured relentless strife since Tinubu’s ascendancy, with its contribution to the GDP diminishing by over 20% since December 2023, as reported by the NBS.
In early August, Tinubu turned his attention to agriculture. As is customary with this administration, a new policy was clandestinely formulated and announced, permitting duty-free importation of agricultural commodities such as wheat, maize, and paddy, despite vehement opposition from farmer groups nationwide.
This policy poses a grave threat to Nigeria’s food security ambitions, as local farmers, facing unfair competition from low-cost producers in Asia, Europe, and America, are compelled to reduce or entirely abandon their production efforts.
It jeopardizes job creation, wealth generation, and the sector’s long-term prosperity, casting a shadow over Nigeria’s sustainability and development.
President Tinubu and his advisers would be wise to redirect their efforts towards crafting sustainable solutions to the systemic shocks afflicting the economy rather than compounding the crisis with measures destined to ignite further turmoil.”
Meanwhile, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has debunked reports making the rounds that the rate for Value-Added Tax (VAT) has been increased from 7.5% to 10%.
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, had recommended an upward review of the Value Added Tax (VAT) from the present 7.5% to 10%. Oyedele disclosed this while speaking on Channels TV last week. This has been widely condemned by many Nigerians including former VP Atiku Abubakar.
In a statement signed and released on Sunday, September 8, Edun stated that VAT rate as contained in relevant tax laws and chargeable on goods and services remains at 7.5%.
It reads; “The current VAT rate is 7.5% and this is what the government is charging on a spectrum of goods and services to which the tax is applicable. Therefore, neither the Federal Government nor any of its agencies will act contrary to what our laws stipulate.
The tax system stands on a tripod, namely tax policy, tax laws and tax administration. All the three must combine well to give us a sound system that gives vitality to the fiscal position of the government.
Our focus as a government is to use fiscal policy in a manner that promotes and enhances strong and sustainable economic growth, reduces poverty as well as makes businesses flourish.
The imputation in some media reports on the issue of VAT and the opinion articles that have sprouted from them seem to wrongly convey the impression that the government is out to make life difficult for Nigerians. That is not correct. If anything, the Federal Government has, through its policies, demonstrated that it is committed to creating a congenial environment for businesses to thrive.
In fact, it is on record that the Federal Government, as part of efforts to bring relief to Nigerians and businesses, recently ordered the stoppage of import duties, tariffs and taxes on rice, wheat, beans and other food items.
For emphasis, as of today, VAT remains 7.5% and that is what will be charged on all the goods and services that are VAT-able,”
