FG constitutes task force on rising food cost plans VAT hike on luxury items

Worried by the spiraling cost of food commodities in the country, the Federal Executive Council (FEC) on Wednesday approved the setting up of a Food Task Force to examine ways to force down the prices.

The meeting presided over by acting President Yemi Osinbajo deliberated on and approved a memorandum to set up the task force on food security with a mandate to determine the actual causes of rise in price despite the availability of the commodities in the country.

Minister of Information and Communication, Lai Mohammed, who briefed State House correspondents on the outcome of the FEC meeting, said the task force would present its interim report at next week’s meeting of the council.

Mohammed said the task force made up of Minister of Agriculture & Rural Development, Audu Ogbeh; Minister of Finance, Mrs. Kemi Adeosun;

Minister of Industry, Trade & Development, Okey Enelamah; Minister of Transportation, Rotimi Amaechi; Minister for Water Resources, Suleiman Adamu and  Minister of Labour & Employment, Chris Ngige.

He said: “FEC considered several memos and approvals were given. The major highlight was that council resolved to set up task force on food security.

“Government is quite concerned about the rising cost of food items and the fact that more often than not even when these products are available, if it does reach the market, they are sold at very exorbitant prices.

“So, the government has set up task force on food security to ensure that an end is put to the wastage that occur and with tons and tons of produce sitting down in the farms rotting or in the markets getting rotten.

“It’s an inter-ministerial committee made up of the ministers of agriculture, finance, water resources, transportation.

“The important thing is to look at what areas of intervention can the government make. The intervention can be in the area of subsidy in transportation. That is being worked out but this goes to show that government is very much concern the rising cost of food price and we are responding to it.

“The committee hopefully is expected to report back to council next week and concrete actions would be taken.

“Clearly government is concerned and is trying to do something to bring it down.”

On the expected bumper harvest which should have forced down the prices of food produce, Mohammed said one hood harvest season was enough to impact on the prices considering the huge population of the country.

The council also approved the revised National Tax Policy geared towards entrenching an efficient tax system and addressing the fiscal challenge of low level of tax to GDP.

Minister of Finance, Kemi Adeosun who spoke in the issue during the briefing, hinted that plans were on to increase VAT on luxury items imported into the country.

She said the National Tax Policy Committee was looking at ways to increase VAT at a percentage to be determined by the National Assembly.

She explained: “What the committee has shown is that we should look at actually increasing VAT on some luxury items,” adding that at 5%, Nigeria’s VAT was the lowest in West Africa.

According to her, “whilst we don’t think VAT should be increased on basic items, if you are going to drink champagne you drink Champagne in the UK and VAT is 20%. Why should it be 5% in Nigeria?

“So, they have made recommendations that we should pull out some luxury items and increase VAT on those items immediately.

“And I think that is a very valid and sensible suggestion which we are going to talk to the National Assembly to see how we can implement it.

“But as far as basic goods are concerned, no. I believe it is only fair that when you consume luxury goods, you should pay a little bit more.

“The National Assembly will decide the percentage.”

Also speaking, Minister of State for Aviation, Hadi Sirika, disclosed that FEC had approved the procurement of first class and economy coaches for the Nigeria Railway to boost transportation on the Abuja-Kaduna railway line during the impending closure of the Nnamdi Azikiwe Airport, Abuja.

“Two executive coaches and another six regular coaches to boost rail transportation on the Abuja Kaduna standard gauge railway to improve on passengers and good and also following the impending closure of the Abuja airport,” he said.