Centre says VAT raise may worsen poverty

The Resource Centre for Human Rights and Civic Education (CHRICED) has said the Federal Government’s planned increment of the Value Added Tax (VAT) to 7.5 percent would backlash against the administration’s quest to prioritize the non-oil sector of the economy.

Executive Director of the centre, Dr. Ibrahim Zikirullahi in Abuja said the nation’s policy makers were only looking for the easiest way out of the revenue constraints, hence their resort to the VAT increment.

“In a country with the highest number of people living in extreme poverty in the world, the first discussion must be wealth creation, not draconian taxation.

“With N30,000 minimum wage still practically in the limbo, especially as many states talk of not being able to pay, the discussion should first focus on how to generate wealth through employment creation,” he noted.

He said over if 70 million Nigerians have been practically shut out of the national economy because they are in the bracket of extreme poor, the implication is that they will neither produce nor consume on the scale that can generate revenue either from VAT or any other form of taxation.

He said, “In a country where power supply remains as epileptic as if it is a war zone, where the transport system is practically non-existent, and where insecurity remains chronic, the important conversation should be how to fix these key areas to provide a basis for economic growth.”

Zikirullahi said the CHRICED Action Civics Network (ACNET) would soon be launched for the citizens to take the initiative as the political elites are taking advantage of the absence of vibrant civil society coalition.