The Federal Government has been advised to suspend its plan to raise the Value Added Tax (VAT) from 5 per cent to 7.5 per
cent. Speaking in Lagos, on the plan of Federal Government to increase VAT, Akin Oladeji-Johnbrown, an international financial advisor and stockbroker, expressed concern that the VAT increase will serve as a disincentive to manufacturing sector and , indirectly , a burden to the populace.
“In reality, there is no increase in wages if you consider inflation and devaluation in naira in the last couple of years,” he argued.
On whether or not the closure of Nigeria’s land borders can achieve government objectives, he said: “This is sovereignty issue. Nigeria has the right to decide how she wants to deal with land borders with other nations. While current approach or method may be faulted, the truth is that it can’t be closed indefinitely. Although border closure is against the spirit of ECOWAS Treaty, Nigeria cannot continue to allow the country to be a dumping ground for foreign goods or means of sabotaging government economic policy. We are all aware of illegal trade via smuggling of items that are inimical to the populace, not to mention the tax evasion associated with smuggling.”
The man who also spoke on the rising Nigeria’s domestic and external debts, said that the real trouble was that the debts have no visible impact on infrastructural development in the country.
“We are increasing our debt and debt mix, but what are we doing with it? Is it to service expenditures or what?,” he queried, adding: “Frankly, there is no visible impact of these borrowings on infrastructure development. We still have a lot of abandoned projects here and there. Government as a matter of public policy should attach debt issuance in a transparent way to enable the public know how the debt is being utilised. It appears the current system of debt utilisation is opaque to the generality of the people, hence government must improve on information flow.”
Concerned about the huge debt profile of Nigeria and huge allocation of budgets to debt financing, he said: “There is nothing unusual in debt financing by any nation. In fact, in theory a little level of debt is required to enhance corporate value.