WITHIN last week, President Mohammadu Buhari made a pronouncement to the fact that his government will not any way bring further stress on Nigerians, and in another, announces Government’s plan to increase value-added tax from 5% to 7.2%, a move that is diametrically opposed to the general welfare of the Nigerian masses, having gone through the excruciating pains and pangs of the economic down-turn since the administration came into office
THE harassing angst of poverty, the low purchasing power of the Nigerian masses, the threat to food security, occasioned by both herdsmen, insurgency/terrorism, kidnappings and other crimes, in the midst of an economy that has been battered through corruption, mismanagement and which nosed-dive, having been hinged on oil, with its attendant vagaries of international prices; notwithstanding the N-Power and Trader-Moni that is yet to go round, the weight of the reserve army of the unemployed Nigerian youth has already and by far swallowed up any gains of such incremental policy measures.
INCREASING VAT at this point in time, is to simply add salt to injury. VAT is, of course a tax on the difference between a commodity’s price before taxes and its cost of production. In short, the manufacturer/business having produced a product or service, and having made his cut of the profit, tags its price plus VAT, which the consumer finally bears the brunt. It becomes very clear then that the commodity tax has only been targeted at the people who buy in the same market with the money bags.
VAT increase, like most other policies, has a trickle-down effect vertically and horizontally. The poor suffering Nigerians are therefore the ones at the receiving end of this government policy: prices are forced abysmally to be up; people’s purchasing power down; this may yet trigger another round of inflation, despite conflicting statements from the authorities vis-à-vis reports or the statistics reeled out by the Nigerian Bureau of Statistics(NBS).
WHEN in 2013/2014 or thereabout the Goodluck Jonathan government, increased the fuel pump price, of the Premium motor spirit, from 87 to 97naira per liter, Labour mobilized Nigerians from all walks of life for an-all round strike action, which nearly brought down his government had he not rescinded his action. And now that Nigerians have sacrificed since the inception of the Buhari government, fuel pump price jacked up from 87 to 145 naira, suffered huge demand gaps owing to low purchasing power. Attempting VAT increase in the way the government suggests, is to further push Nigerians into misery and a cesspool of poverty.
GOING ahead with such a policy is tantamount to occupants of transient power detaching themselves from the people that voted them in the first place. IT is also, not appreciating the sacrifices the people have made and still do make. This policy will further exacerbate inequality by empowering the rich and the political class. Insisting to go on simply depicts insensitivity to the plight of Nigerians. And Nigerians must resist it by all means.
WE urge the government to tinker with such a move. If they must increase VAT, let it be on selected items, especially luxury commodities and or services. Also, the political class must be made to cut their pay by 40% if the leadership is serious enough.