Isaac Anumihe, Abuja
In a bid to refloat the economy and escape another recession in the economy, stakeholders have proposed an increase in Value Added Tax (VAT) and reintroduction of toll gates on Nigerian roads.
One of the stakeholders who is also the Lead Director of Centre for Social Justice, Eze Onyekpere, advised President Muhammadu Buhari and the National Assembly to urgently consider increasing the Value Added Tax from five per cent to 7.5 per cent and also activate measures to increase collection efficiency.
Besides, the Federal Government should account for and utilise stamp duties which have accrued trillions of naira at the Central Bank of Nigeria (CBN). It should equally review Petroleum Sharing Contracts as recommended in various Nigerian Extractive Industries Transparent Initiative Studies.
According to him, this will bring in additional revenue of not less than $1.6 billion every year. Onyekpere also proposed reintroduction of tollgates on Nigerian roads, saying that it would help to fix broken-down infrastructure.
“There should be expedited passage and assent to the Petroleum Industry Bill for reforms in the oil and gas sector as this will also increase revenue from oil and gas extraction” he said.
But a development economist, Mr Odilim Enwegbara, proposed that VAT should be increased to 10 per cent from five per cent. He, however, regretted that much of the tax revenues get diverted by corrupt officials.
To refloat the economy, he said, will require doubling government revenue receipts through tax particularly Value Added Tax (VAT).
“Besides, efforts to increase VAT to at least 10 per cent with as high as 20 per cent on luxury consumptions, tax collection and remittance infrastructure in Nigeria remains outmoded to the extent that as high as 70 per cent of VAT money get diverted by collecting and remitting firms in connivance with Federal Inland Revenue Service (FIRS) officiating.
“It will require that the items on the exclusive list such as solid mining and billings for interstate traffic offences along with the introduction of auto number plate be renewed. These will definitely increase states’ IGRs.
The Zamfara State Governor and the chairman of Nigerian Governors’ Forum, Abdulaziz Yari, had warned of a possible economic recession due to the decline in oil price and debt overhand.
“We are expecting the possibility of another cycle of recession by mid-2020 and which may last up to third quarter of 2021,” Yari said.