The Association of Bureaux De Change Operators (ABCON) has warned the Federal Government against the proposed increment in Value Added Tax (VAT).
While condemning the Federal Government’s move to expand the VAT net and increase it, the Bureaux De Change operators unanimously said it was a conflicting strategy, and it would leave a lot of people out of job.
They maintained that the VAT increase would accentuate unemployment and promote poverty in the country.
According to the Bureaux De Change operators, the immediate implication of the VAT increment is that every Nigerian would either directly or indirectly be affected.
Disclosing the revenue generated from the VAT, the operators made known that the average VAT collection in the past six years was about N900 billion.
“But beyond the revenue increase of about 50%, there will be other attendant consequences, such as higher inflation rate, interest rate hike, more unemployment and people will generally become poorer.
“It will increase the burden on the poor and SMEs contrary to the 2017 National Tax Policy,” they were quoted.
Recall that the Federal Executive Council (FEC) had approved the increment of the VAT to 7.5% from 5%. The Minister of Finance, Budget and National Planning, Zainab Ahmed disclosed this to state house correspondents at the end of the cabinet meeting on Wednesday, September 11, 2019.
What you should know: If approved by the federal lawmakers, the new VAT rate will take effect in 2020. In Nigeria, VAT replaced the sales tax in 1994 and was pegged at 5% by the military government of Sani Abacha.
In 2007, former President Olusegun Obasanjo increased VAT to 10% on the eve of his departure from office but it was reversed by his successor, Umaru Musa Yar’Adua, following opposition from the Labour Unions.
Meanwhile, it is pertinent to note that despite wide criticisms that have greeted both the VAT increment, the Federal Government considers the move as the most potent channels to meet the new minimum wage implementation.