The national leader of Nigeria’s ruling party has opposed the federal government’s plan to increase the Value Added Tax (VAT).
He said an increase in VAT will reduce the purchasing power of Nigerian consumers and is capable of increasing hardship in the country.
“This is why I appeal on Mr Osinbajo (Yemi) and his team to put a huge question mark on any increase on VAT please…”, Mr Tinubu said.
The APC national leader spoke Thursday during the 11th colloquium event marking his 67th Birthday celebration at the International Conference Centre in Abuja.
The comment by the former Lagos State governor is coming barely hours after Minister of Finance, Zainab Ahmed, said the administration has concluded plans to increase revenue by introducing new taxes.
Mrs Ahmed who spoke at the public hearing on the 2019 budget organised by the Senate and House of Representatives committees on appropriation Wednesday said the federal government has devised a new revenue initiative to increase revenue to fund this year’s budget.
She said the initiative is segregated into three thematic areas and appealed for the support of the National Assembly.
Opposing any plan to increase taxes, Mr Tinubu said the government should rather widen the tax net and include those who are not yet being taxed. “Let’s make the nets get bigger so we take in more taxes.
“That is what we must do in the country instead of putting an additional layer of taxes for now.”
Voices Against Tax Increase
Apart from Mr Tinubu, many Nigerians, labour unions and civic groups have kicked against the plan to increase taxes, warning against its ripple effect on the masses.
They particularly questioned the wisdom behind the government’s plan on increasing VAT to fund the minimum wage.
Days before the announcement by the finance minister, Budget and National Planning Minister, Udo Udoma, had explained that the government was planning on increasing VAT by 50 per cent to pay the new national minimum wage.
The Senate had passed for third reading a bill seeking to increase Nigeria’s minimum wage from N18,000 to N30,000.
Opposing the VAT plan, the President of the United Labour Congress (ULC) said the workers’ union would not accept any increase on taxes.
He said if the government was contemplating an increase in VAT to fund the new minimum wage, it should be discussed with stakeholders.
Also, Nigeria’s influential employer’s union warned that increasing VAT after approving a new wage would have far-reaching implications for the economy.
The VAT is currently being charged at five per cent.