THESHIELD Garkuwa
Related Articles
We have observed with keen interests the recent bill sent by His Excellency, the
President of the Federal Republic of Nigeria, President Bola Ahmed Tinubu GCFR on Tax Reform, and the comments made by well-meaning individuals
and organizations regarding its consequences to various constuent parts of the nation.
As a leading member of the Organised Private Sector, we want to lend our voices on the clarion call to His Excellency the President of the Federal Republic of Nigeria to please reconsider the issues raised in the proposed bill, particularly as it relates to the sharing formula proposed in the bill.
The major issue is the Clause that proposed 60% of the VAT received will go to the state of collection.
This to us as a Business Member Organisation needs to be
seriously and carefully looked into as it could lead to complex operation(implementation) of the bill if and when eventually it becomes an Act of
Parliament.
A situation whereby the proposed amendments state that revenue generated from Value Added Tax (VAT) will be shared on the derivation-based model and will
definitely put a number of regions at a disadvantaged position.
This is because companies compute and remit VAT using the location of their headquarters and tax office and not where services and goods are consumed.
What this means is that some states will be short-changed because major companies will pay their VAT to Lagos state, where their headquarters are instead of the states where they have their operations or location where the service and or product are consumed.
And therefore should be to note that VAT is a consumption tax, which should be paid at the point of consumption and not the point of production.
It is against this background that we wish to appeal to the President, Federal Republic of Nigeria, to reconsider this bill because of its serious implications (economic, social, and political).
As a Chamber, we want to advise that the following measures be taken: Vis
i. That His Excellency uses the tax reform to include proper attribution of
tax to areas of collection before derivation
ii. For fairness and justice, the president should conduct public hearing in
all the 6 geo-Political zones
Doing these will help in no small measure in coming up with an agreeable formula
and pattern on the model that will be fair, equitable, and acceptable to all.
Esv. Ishaya Idi,fnivs,
President/Chairman of Council
