Nigeria’s main opposition party, Peoples Democratic Party (PDP), has advised the Federal Government to reverse its decision to increase the Value Added Tax (VAT) from 5 per cent to 7.2 per cent.
The President Muhammadu Buhari administration on Wednesday, September 11, approved an increase in Nigeria’s Value Added Tax (VAT) from five per cent to 7.2 per cent effective next year.
Concise News reports that Nigeria’s Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed, told newsmen that the decision was to enable government properly fund the new national minimum wage of 30,000 naira.
“We will begin consultations and consultations will be at various levels in the country. So it includes consultations with the states, with the local governments, with the parliament as well as with the Nigerian public. For the VAT increase to take effect, there has to be an amendment to the VAT Act,” she said after the Federal Executive Council meeting presided over President Muhammadu Buhari.
“The expenditure for the year 2020 is in the total sum of N10.07 trillion. This is three per cent less than the approved expenditure in the 2019 budget that has been passed into law.
“The total expenditure includes statutory transfers, non-debt recurrent expenditure such as salaries and pensions and also the social intervention Programme.”
But the PDP rejected the decision.
Spokesman for the former ruling party Kola Ologbondiyan on Thursday said that Nigerians could not bear such burden under the prevailing economic situation.
“The PDP insists that the decision to increase VAT on already impoverished citizens is in bad faith and cannot be justified under any guise,” a statement from him read.
He said such increment would put more pressure on families and businesses as it would result in an increase in costs of goods and services that have direct bearing on the welfare of the people.
Ologbondiyan said that instead of foisting more tax burden on Nigerians, Buhari should recover the over N14 trillion oil money alleged to have been stolen in the last four years.
“The PDP therefore urges the National Assembly to protect Nigerians and save the nation from collapse by rejecting this injurious decision by the Buhari Presidency,” he said.