2 hours ago
7
The push by a group from the Northern region of the country to have the proposed Value Added Tax suspended got another support on Friday from the Arewa Economic Forum ( AEF) .
Ibrahim Shehu Dandakata, the Chairman of the Forum at a press briefing in Abuja urged the Federal Government to replace the current VAT model “With a simpler sales tax.”
“A simpler sales tax that serves as a genuine consumption tax paid at the point of sale as against the current VAT model “Which is a multi-layered tax structure.”
This change he said “would bring more companies, enterprises, and services under the government’s tax net, thereby enhancing collection efficiency and enabling a fairer distribution of revenue based on derivation.”
The simpler sales tax proposed by the Forum, according to Dandakata, is cheaper. “As a government, sales tax is cheaper because it’s one point tax at the point of sales, VAT is a multilayered tax.”
He lamented that the current VAT regime leaves product end consumer bearing the burden.
Under the current VAT regime, AEF chairman noted that “at every point of transaction, we charge VAT. If you produce and you sell to a distributor, you charge a distributor VAT.
“If the distributor sells to a wholesaler, you charge VAT. At every point, you charge VAT. These multi layered VAT regime he said eventually translates to costs that are transferred to the end users.
Shedding light on VAT model currently before the National Assembly, Dandakata argued that “What we are saying is that One of the biggest challenges the Federal Government has is collecting the tax. They don’t have the infrastructure and facilities to collect tax. And that’s the reason why they’re trying to formalize it.”
“So if you can’t collect, how do you get it reversed or reimburse a producer or distributor? How do you identify the person that needs the reversal?
“That’s why we’re saying that instead of going to the executor’s office, this is an easy way of widening the tax net, because if you are collecting the sales tax at the point of sales, that means that particular entity will be part of the tax net.”
Make it simpler and easier for people to pay tax, one-point tax, and we don’t have to go through all that rig maroll of getting the fund at the base. That would be very cumbersome and we know it’s not going to work. Sir, are you saying that if they are that one-point tax? It’s value-added.
With regards to the energy situation in Northern Nigeria, the Arewa Economic Forum Chairman believes that “addressing the region’s energy security and ensuring the availability and affordability of energy will be instrumental in driving economic growth.”
Dandakata reiterated the forum’s call for the federal government to site one of the four proposed 100,000 barrels per day refineries by Korean investors in Kolmani, Bauchi state.
“This initiative would significantly reduce the costs of refining and transportation, while effectively meeting a substantial part of the northern market’s needs” he said.
“Also, the Kolmani Integrated Development Project, which had reportedly attracted Foreign Direct Investment (FDI) of about $3 billion, was designed to house a 120,000-barrels per day refinery, a 500-million standard cubic feet per day gas processing plant, a 300-megawatt capacity power plant, and a fertiliser plant of 2,500 tons per day” he disclosed.
“We’re asking the federal government is to use its influence to make sure that a lot of the refineries are sited in combined fields. Not the federal government investing in the refineries. We have seen that, and we know that the government has no capacity to do that” he stated.
On Security Issues, the Arewa Economic Forum commended “the Federal Government and security agencies for their commitment to eradicating banditry in our region.”
“However, we urge the government to address the urgent needs of addressing banditry, terrorism and other organised crimes leading to vandalism of infrastructure and desertion of farm land and several communities”.
“Counter insurgency are critical to the stability of our region and the nation at large, especially concerning harvesting and exploring the potential of our agriculture, commerce, and mining resources.
“We implore government agencies at all levels to expedite efforts in this regard, so that our lives can become safer and more affordable, especially in light of the direct link between food inflation and insecurity.”
Please follow and like us:
