Economist advises govt on new VAT

Stories by Fatima Muraina
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An Economist,  Elder Fessy Olabode has cautioned the Federal Government against full blown implementation of the new Value Added Tax to avoid crippling the economy of the nation.

He advised the government and its agencies to ensure that they exempt some items crucial  to the life of the small scale industries in the implementation of the Value Added Tax ( VAT), so that it will not be counter productive.

Olabode, who spoke in an interview with The Hope said government should find a way to exempt some crucial  goods people use regularly to reduce incidents taxation especially on food and health items.

The State Chairman of the Nigeria Association of Small Scale Industrialists (NASSI), Greatseyi Akintunde, in his reaction, descried the new VAT implementation as grossly affecting the small scale industries and wondered what would  happen in future.

His words: ” It is obvious that 7.5 percent of our income goes to VAT not minding other taxes that will be collected from small  businesses. Mind you, there is going to be sign post, i.e advert rate, business premises payment and these most times affect  our profit which if deep into the purse, will affect our capital”.

“Before you know it, instead of growth in the sector there will be decline ” he said.

He called on the State government and those in authority to meet with the Federal government to make case for the small scale industrialists particularly those who are not making as much as those in Lagos State.

Also, Mr Hakeen Adebumiti urged federal government to be sincere with its programmes, saying that people should be able to see the effect on infrastructure and the economy.

He said government must be able to improve on the epileptic power supply and the bad roads across the country.

It would be recalled that the federal government said it has exempted some items from VAT payment among these included Basic food items–Additives (honey), bread, cereals, cooking oils, culinary herbs, fish, flour and starch, fruits (fresh or dried), live or raw meat and poultry, milk, nuts, pulses, roots, salt, vegetables, water (natural water and table water)

Locally manufactured sanitary towels, pads or tampons.

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Tuition relating to nursery, primary, secondary and tertiary education were not left out.