Why we passed Finance Bill proposing 2.5% hike in VAT-Senate
The Senate, Nigeria’s upper legislative chamber of the National Assembly has said that its decision to pass the Finance Bill, which among other tax reforms proposes a 2.5 per cent hike in the Value Added Tax VAT, was informed by the urgent need to harness more funds into the Federal Government’s coffers.
In addition to increasing VAT from the current five to 7.5 per cent, the bill also seeks to amend six tax provisions and make them more responsive to tax reform policies and also to amend the Customs and Excise Tariff Act CEMA to encourage local manufacturers.
Other legislations under the bill include Companies Income Tax, Capital Gains Tax Act, Petroleum Profit Tax, Personal Income Tax, and Stamp Duties Act.
The passage of the bill was sequel to the presentation of the report of the Senate Committee on Finance by Senator Adeola Solomon, Thursday during plenary, having earlier scaled through the third reading on the floor of the of the upper legislative chamber.
Senator Solomon had observed that apart from bringing more revenue to the coffers of the government to pursue its developmental programmes, the bill will revamp the entire landscape of the nation’s tax systems and regime.
Other lawmakers present at plenary had thereafter, given their perspectives on the effects of the bill on the nation and its citizens.
Senator Barau Jibrin in his contributions told his colleagues that the committee considered the need for Nigeria to reposition its system in order to strengthen its revenue base.
Similarly, Senator Abdullahi Yahaya, who also shared his perspective on the matter, noted that revenue generation was a major problem facing the country and economic issues should not be politicised.
He said, “The problem of our economy is the problem of revenue; the issue of economy is one that is beyond politics to me.
“Whether it is All Progressives Alliance APC, today or the Peoples Democratic Party PDP tomorrow, we have to come out and look at this matter in a non-partisan way.”
In his remarks, Senator Ibikunle Amosun stressed that there was no way the country would realise its developmental goals and aspirations without adequate revenue.
He expressed the hopeful that all funds generated would not be looted but would be judiciously used for the growth of the nation’s economy.
Senator Amosun aligned himself with the position of Senator Yahaya that the lawmakers must look beyond politics.
“This is not about party but about our country. I will support this bill and will urge my colleagues that we should do away with partisanship,” he also stated.
Meanwhile, some lawmakers expressed concerns over some of the tax bills. One of such Senators was the Senate Minority Leader, Senator Enyinnaya Abaribe, who insisted that the Value Added Tax should be left at five per cent instead of the proposed 7.5 per cent, given the economic crunch many Nigerians are currently going through.
His contribution was, however, not taken into consideration by the Senate President, Ahmed Lawan, who ruled that Senator Abaribe should have raised the alarm during the second reading and not when the committee had submitted its report.
The Senate President however thanked his colleagues for the passage of the bill which he said would ensure the streamlining of the nation’s tax systems.