Don’t undermine FG’s plan on VAT increase, BMO urges PDP

The Buhari Media Organisation (BMO) has urged the Peoples Democratic Party (PDP) not to undermine the Federal Government’s plan to increase the Value Added Tax (VAT) from 5 per cent to 7.5 per cent.
BMO in a statement signed by its Chairman Niyi Akinsiju, in Abuja on Tuesday, described the plan as patriotic and genuine geared towards raising the needed resources to address some of the major infrastructural needs of the country.
The PDP had in a statement issued on Sept. 12 by its National Publicity Secretary, Mr Kola Ologbondiyan, protested against the government’s decision to increase the VAT.
BMO urged the party not to undermine a patriotic and genuine effort of President Muhammadu Buhari’s administration to raise the needed resources to address some of the major infrastructural needs of Nigerians.
“PDP should genuinely express concern that Nigerians could not bear the burden of the 2.2 per cent marginal increase in VAT under the prevailing economic situation in the country.
“The party should have first demonstrated its patriotism and genuine concern for Nigerians by directing its Governors, who were part and parcel of the decision to effect increase in the country’s tax regime, to reject the idea rather than calling on the federal government to reverse its decision on the new policy.
“In any case, states and Local Governments stand to benefit more from the increase in VAT; the states get 50 per cent of the VAT collection, Local Governments get 35 per cent , leaving the federal government with a paltry 15 per cent,” it said.
According to the organisation, this particular increase in VAT is another bail-out mechanism designed by Buhari to assuage the woes of those perennially broke tiers of government.
“Even with the new marginal increase, Nigeria has one of the lowest VAT rates in the world, and considering the huge infrastructural deficit the country is facing today, the current government has to think outside the box.
“And look for how best to raise resources to meet some of the major needs of its people and also ensure that the impact does not put much burden on the citizenry.
“And this is what the government is trying to do with this marginal increase in VAT.”
It added that VAT is not paid on domestic foodstuffs and local transportation.
Other items excluded from VAT are drugs, medical equipment, educational materials and other items that generally affect the purse of the man on the street, the organisation said.
“Essentially, VAT is payable on luxury goods, cigarette, wine, air travel and other luxury items that are the exclusive preserve of the rich and the opulent.
“Also in the light of global trend, it has become imperative for our government to harmonise Nigeria’s VAT rate with what obtains within the ECOWAS region.
“Even with the marginal increase of 2.2 per cent, Nigeria is still far below all the African countries in the VAT rate regime,” BMO said.