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Senate approves bill to increase VAT payment by FG
THE Senate on Thursday approved the request by President Muhammadu Buhari to increase value-added tax (VAT) from five per cent to 7.5 per cent.
In September, the federal executive council (FEC) approved an increase in VAT and subsequently sent a bill to the National Assembly for consent.
During the clause-by-clause consideration of the bill, Enyinnaya Abaribe, the Senate minority leader, protested the increase of VAT to 7.5 per cent from 5 per cent. The minority leader prayed the House to maintain the status quo, “Nigerians have suffered enough,” he said.
However, the Senate approved the request after Solomon Olamilekan, chairman of the finance committee, presented a report on a bill entitled ‘Nigeria tax and fiscal law’.
After the consideration of the clauses, Ahmad Lawan, Senate President, did not give room for amendment on the position of Abaribe but said the federal government will have resources to bridge the infrastructural gap in the country.
“Let me thank you for passing these seven amendments, largely to ensure that they streamline the tax system in Nigeria to ensure that we get revenue for the government to provide services and infrastructure to the citizens of this country,” he said.
“This is not only to ensure that we have credible sources of funding but ensure we have funding for other things of government. What we will do is engage revenue agency on a quarterly basis.”
However, a coalition of Civil Society Organisations has called for reforms on the Federal Government’s new fiscal policies which it says does not take into account the economic position of Nigerians and would only increase the inequality gap.
“At the state level, there is no definite framework to tax the informal sector, these citizens of Nigeria who do their business at this economic level are only left at the discretion of the “man in power” at the state level as they are subject to any form of discretionary changes in the counts and rates of the taxes paid,” said Auwal Ibrahim Musa, Executive Director, CIVIL Society Legislative Advocacy Centre ( CISLAC).
The amendments which will become law when they are signed by the president seeks to amend company tax CAP C21 Laws of the Federation of Nigeria 2004, VAT CAP 4 2007, customs and excise tariff act CAP C49 Laws of the federation, personal income tax E8 laws of the federation, capital gains tax act CAP C1 laws of the federation, stock duty act 58 laws of the federation and petroleum profit tax law.