Stakeholders have continued to react to the new Finance Bill Act signed into law by President Muhammadu Buhari on Monday.
The signing of the bill into law by the president welcomes sweeping new changes in the country’s tax system as the VAT rate went up from 5 per cent to 7.5 per cent, warning the government against seeing the private sector as a cash cow in its drive to increase revenue.
According to the Lagos Chamber of Commerce and Industry, (LCCI), the new bill could endanger the productivity of Nigerians with some of its provisions.
In his opinion, Director General, LCCI, Muda Yusuf, warned the government against seeing the private sector as a cash cow in its drive to increase revenue. He expressed concerns about the increase in Value Added Tax (VAT), stating that it was inappropriate to compel loss-making firms to pay tax, no matter how little.
“The government should not see the private sector as a ‘cash cow’ in its drive to raise revenue, as it will do more harm to the already burdened private sector and further impoverish citizens that the president promised to take out of poverty.
“The common man will definitely be at the receiving end of the increase in VAT. Even if businesses are taxed more through likely illegal levies and rates outside the provisions of the law, they will naturally pass the cost to the customers whose purchasing power is already at the lowest ebb.
“The government should put mechanisms in place to eliminate leakages as a large chunk of the Internally Generated Revenue realised does not find its way into government coffers. They should drastically cut the cost of governance. Several aides kept at prohibitive cost are needless,” he said.
In his own opinion, Director General of the Nigeria Employers’ Consultative Association (NECA), Timothy Olawale, acknowledged that the new law amended the Petroleum Profit Tax Act, Customs and Excise Tariff Act, Company Income Tax Act, Personal Income Tax Act, Value Added Tax, Stamp Duties Act and the Capital Gains Tax.
“Apart from the increase in VAT, some other changes would include a situation where Nigerians who want to open or maintain accounts with the deposit money banks will not have to provide their Tax Identification Number to do so, which is commendable.
“Again, the fact that the Federal Government has raised the threshold from which stamp duty will be charged for online transactions from the current N1, 000 to N10,000,” Olawale said.