Former Vice President, Atiku Abubakar, has warned that the increase in petrol price and Value Added Tax (VAT) by the federal government has put most Nigerians at a breaking point.... CLICK TO READ THE FULL NEWS HERE▶▶
In a statement on Sunday via his X handle, Atiku said the policy would deepen the domestic cost-of-living crisis.
He noted that this move, coming on the heels of the increase in the pump price of Premium Motor Spirit, also known as petrol, by the Nigerian National Petroleum Corporation Limited, NNPCL, was “destined to deepen the domestic cost-of-living crisis and exacerbate Nigeria’s already fragile economic growth.”
He said: “The increase in VAT is set to become the blazing inferno that will consume the very essence of our people… Tinubu’s actions reflect a profound insensitivity to the plight of the less fortunate as he indulges in the opulent renovation of villas and the acquisition of new jets and vehicles for himself and his family.
“President Bola Tinubu, alongside his coterie of advisers, has resolved to raise the VAT rate from 7.5 per cent to 10 per cent, even as the NNPCL has announced a soaring PMS price increase at the pump.
“This move unveils a new era of regressive and punitive policies, and its impact is destined to deepen the domestic cost-of-living crisis and exacerbate Nigeria’s already fragile economic growth.
“President Tinubu and his entourage seem to be resorting to their familiar tactic: heaping burdens upon the impoverished, while steadfastly ignoring their extravagant excesses!
“One does not need to be an economist to grasp the ominous implications of President Tinubu’s ill-conceived policies for Nigeria’s future. The relentless rise in taxes and interest rates has proven excessively onerous, debilitating businesses of all sizes and leading to job losses while intensifying the suffering of the poor.”
Similarly, he said the manufacturing sector, in particular, has endured relentless strife since Tinubu assumed power, with its contribution to GDP diminishing by over 20 per cent since December 2023, as reported by the NBS.
“In early August, Tinubu turned his attention to agriculture. As is customary with this administration, a new policy was clandestinely formulated and announced, permitting duty-free importation of agricultural commodities such as wheat, maize, and paddy, despite vehement opposition from farmer groups nationwide.
“This policy poses a grave threat to Nigeria’s food security ambitions, as local farmers, facing unfair competition from low-cost producers in Asia, Europe, and America, are compelled to reduce or entirely abandon their production efforts.
‘’It jeopardises job creation, wealth generation, and the sector’s long-term prosperity, casting a shadow over Nigeria’s sustainability and development,’’ Atiku said.
Meanwhile, the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has refuted reports suggesting an increase in the Value-Added Tax rate from 7.5 per cent to 10 per cent.
In a statement signed by him on Monday, Edun clarified that the VAT rate remains unchanged at 7.5 per cent, as stipulated in the nation’s tax laws.
“The current VAT rate is 7.5% and this is what the government is charging on a spectrum of goods and services to which the tax is applicable. Therefore, neither the Federal Government nor any of its agencies will act contrary to what our laws stipulate,” Edun affirmed.
He further explained the importance of maintaining a balanced tax system, emphasising that Nigeria’s tax framework is built on three key pillars- tax policy, tax laws, and tax administration.
“The tax system stands on a tripod, namely tax policy, tax laws, and tax administration. All the three must combine well to give us a sound system that gives vitality to the fiscal position of the government,” the minister said.
Addressing concerns over government actions perceived as burdensome, Edun reassured Nigerians that fiscal policies are designed to promote sustainable economic growth and alleviate poverty, not to hinder them.
“Our focus as a government is to use fiscal policy in a manner that promotes and enhances strong and sustainable economic growth, reduces poverty as well as makes businesses flourish,” he stated.
“The imputation in some media reports on the issue of VAT and the opinion articles that have sprouted from them seem to wrongly convey the impression that the government is out to make life difficult for Nigerians. That is not correct. If anything, the Federal Government has, through its policies, demonstrated that it is committed to creating a congenial environment for businesses to thrive,” he stated.
He also highlighted recent government initiatives to ease the financial burden on citizens, particularly regarding food imports.
“In fact, it is on record that the Federal Government, as part of efforts to bring relief to Nigerians and businesses, recently ordered the stoppage of import duties, tariffs, and taxes on rice, wheat, beans, and other food items,” Edun noted.
For clarity, Edun reiterated that VAT remains at 7.5 per cent and will continue to be applied to all VAT-eligible goods and services.
“For emphasis, as of today, VAT remains 7.5% and that is what will be charged on all the goods and services that are VAT-able,” he concluded.
