New VAT regime: Iche tasks FG on policy reversal

 COMFORT EKELEME

Association of Micro Entrepreneurs of Nigeria (AMEN) has called on the Federal Government not to implement the 7.5per cent Value Added Tax (VAT) proposed to begin February 1, saying the development will have negative effect on the nation’s economy and the masses in a huge way.

National President of AMEN, Prince Saviour Iche, while speaking with newsmen in Lagos said government should have engaged the stakeholders in order to bring out ideas that would help grow the economy.

The Federal Government had said from February 1 it would begin the implementation of 7.5 per cent VAT espoused by the finance law.

The law, according to the government, will take effect after all the necessary administrative procedures must have been completed, especially the gazette of the Act by the Federal Ministry of Justice.

With the N30, 000 minimum wage and with some state Governors still dragging their feet to pay, Iche maintained that the masses will suffer it if VAT increment is implemented.

On the cost of production, the AMEN President said immediately the increment was announced, companies started sending messages of price increase, adding that it is a very bad concept especially now that the country is facing economic challenges.

According to him, there are many ways the federal government can raise revenue not necessarily from VAT.

Speaking further, the AMEN President was of the view that the policy is not good enough.

“I believe the time is not late for them to reverse it, the government should have engaged the stakeholders in order to bring out ideas. One of the easiest ways the government can increase its revenue is to cut down the cost of governance. The labour Union is expected to speak for the masses.

“On the contrary, the strategy entrepreneurs can adopt on is to reduce the cost, apart from the cost is to reduce the quality of the product, but we cannot do that because we have integrity to protect. The only thing we need to do is to still cry to the government to help us. We power our factory by ourselves, we raise money by ourselves. As I am crying out, everybody should beg the government.

“Another effect this will have is the massive and relocation of industries out of Nigeria, and it has been happening since the inception of border closure. The last time I spoke to the media, over 90 of my members have relocated, as we speak about 180 are planning to leave because of the VAT increment.

The Minister of Finance, Mrs Zainab Ahmed had confirmed the development at the inauguration of the board of the Federal Inland Revenue Service (FIRS).

She said the February 1 commencement date had put to rest every speculation regarding the take-off date of the new VAT regime.

The Minister said once a bill is signed into law, it takes effect immediately, but noted that there were certain administrative procedures and formalities to be finalized before commencement.

The VAT increase which is meant to help government achieve its revenue projections for the 2020 budget is a part of the tax reforms included in the 2019 Finance Act.

She said with the Act, there would be more revenue to finance key government projects especially in the areas of health, education and critical infrastructure.

She said, “The implementation of the Value Added Tax is to take effect from February 1, 2020, after all the necessary administrative procedures have been completed, especially the gazette of the Act by the Federal Ministry of Justice.”

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