The Minister of State for Budget and National Planning, Prince Clem Agba, has defended the recent increase in Value Added Tax (VAT) from 5 per cent to 7.5 per cent by the federal government, saying despite the increase, Nigeria still has the lowest tax rate in the world.
Agba wondered why Nigerians are protesting against the increase, assuring them that accruals from the tax would be used to boost infrastructure and social amenities for ordinary Nigerians, and noted that the increase from 5 per cent to 7.5 per cent is negligible considering that it was just additional 2.5 per cent.
The minister, who stated this at the 2019 Etsako Day celebration in Lagos at the weekend, reiterated that the increment would cater for the execution of strategic development plans and provision of critical infrastructure in different parts of the country, adding that the government would also provide incentive for agriculture so that the country would attain self-sufficiency in food production.
He said the President Muhammadu Buhari administration would not willfully put in place policies that would emasculate the citizens economically, and explained that the proposed new tax system “does not affect the common man because all the staple food, medication, and education that have to do with the common man are exempted from VAT.”
Agba, who graced the 2019 Etsako Day celebration in Lagos with the theme: ‘Showcasing the Cultural Heritage and Investment Opportunities of Etsako’, advised Nigerians to begin to identify natural resources located in their geographical areas and draw their attention to them in order to attract investment to those areas.
According to him, “Nigerians are complaining about the recent decision to increase VAT, but the government is merely increasing VAT by 2 .5 percent to make it 7.5 percen, and if you don’t know, Nigeria has the lowest VAT rate in the world; even in the West African coast, a lot of people talk about Ghana reducing its VAT recently and why are we increasing ours? Ghana has only reduced it tax from 15 to 12 while we are going from 5 to 7.5 per cent.
“I am a farmer myself, but people still see agriculture as a local thing for local people, however, l will tell you it is not. If we are self-sufficient in agriculture, then we will be able to feed ourselves. That is where it all begins, and if we can’t feed ourselves, then we will have problem with our foreign exchange that we keep talking about. If we begin to use what we have earned from other sources to bring in food, that is not good.”