THE proposed 20 percent consumption tax being mooted by the federal government will cause rippled negative effects on the socioeconomic fabric of the country, experts have said.
Speaking with a cross section of economic and financial pundits at the weekend, they informed that the proponents of the planned 20 percent consumption tax increase don’t have the interest of populace at heart.
Firing the first salvo, Teslim Shitta-Bey, the Chief Economic Adviser at Proshare Nigeria, said the arguments been advanced for the planned imposition of the 20 percent consumption tax is not only faulty but stands truth on its head.
According to him, rather than look at the issues dispassionately the government apologists have resorted to cheap blackmail by whipping up emotions.
“Those pushing the arguments for the increase in consumption tax are saying that the companies producing carbonated drinks are putting more sugar content,” he informed.
Pressed further, Shitta-Bey said there is any form of price increase for carbonated drinks people will look for alternatives.
“If you say because you don’t want people to consume sugar you increase the price, you will be empowering the unregistered local producers like kunu or zobo drink vendors who you cannot manage and control. You will create a kind of a cobra effect, a situation where the solution you’re trying to prevent is even worse than the problem itself.”
Citing the example of the ban in tobacco products, he said the overregulation of the tobacco industry has made consumers of the various brand to trade down by consuming products even more harmful and lethal.
The government, he stressed by their actions and inactions are trying to entrench an underground economy which in itself is dangerous, and very difficult to manage and control.
On the arguments that the consumption of carbonated drinks may cause more health emergencies thereby tasking government resources in the area of healthcare, the erudite economist punctured that claim.
Citing the report from the World Health Organisation (WHO) he said an average Nigerian is responsible for at least 70 percent of his healthcare needs which he takes care of from his personal finance thus leaving the government little or no room to intervene.
Echoing similar sentiments, Wale Adesoji said the anticipated taxes the government wants to generate would be eroded as reduction in sales and patronage will ultimately affect profit and sales thus leading to loss of revenue, job cuts to mention just a few.