Juliana Taiwo-Obalonye, Abuja
Former Senate Leader, Ali Ndume, has advised the Federal Government to jettison its plan to increase Value Added Tax from 5 per cent to 7.2 per cent from next year.
He made the call while fielding questions from State House Correspondents after a closed door meeting Thursday with Vice President Yemi Osinbajo, at the Presidential Villa, Abuja.
The Federal Executive Council (FEC), presided over by President Muhammadu Buhari, last month approved a 2.2 per cent increase in Value Added Tax (VAT) moving it from 5 to 7.2 percent.
But according to Senator Ndume, Nigerian masses will be worst hit should the government go ahead to increase VAT.
He however threw his weight behind plans to increase property and communication taxes in the country.
Ndume is the sponsor of the Bill for an Act to establish the Communication Service Tax, which he formally introduced on the floor of the Senate on Wednesday before it passed the first reading.
According to the former majority leader, “I feel that increase in VAT is going to have a spiral effect; and it is going to affect the poor more.
“It is true the government is not expanding the revenue base or the tax.., that is why I am thinking that anybody that is using telephone here would want to just talk and pay for it of course but right now, none of you will say this is what I am paying for telephone; if it tells you one minute remaining, you start looking for any recharge card.
“But if you are taxed on that, you won’t say you want to talk again because you are taxed.
With VAT increase, the effect will be that every commodity even transportation from one point to another will increase and who is going to pay or who is going to feel it more; it is the poor; so that is why I am saying that we should introduce Communications Service Tax and people will pay for it sometimes even not knowing.” The Borno -born lawmaker said through the property and communications tax, government will be able to generate more revenue. “Do you know the money the service providers are making out of communications. “So, that is why I sponsored that Bill at the last senate but it didn’t… because of time and of course service providers opposed that.”
On property tax bill, he said “Let me add one thing, yes we have a government; the tax should be paid by those who can; who should or can afford that tax.