Ndume cautions FG over proposed VAT increase
hails decision on tolls return
The Chairman, Senate Committee on Army, Senator Ali Ndume, has warned the Federal Government against the proposed increase in Value Added Tax from 5 per cent to 7.2 per cent, arguing that the move will inflict more suffering on Nigerians.
Ndume spoke on Thursday while fielding questions from State House Correspondents after he met with Vice President Yemi Osinbajo, SAN, at the Presidential Villa, Abuja.
It would be recalled that Federal Executive Council (FEC), presided over by President Muhammadu Buhari, recently okayed the decision on a 2.2 per cent increase in VAT to move it from five to 7.2 per cent.
The Senator, however, advised the Federal Government to jettison the idea insisting that the masses would be worst hit if the increment is implemented.
He, however, threw his weight behind the government on the plan to increase property as well as communication taxes in the country.
He noted that he has sponsored a Bill for an Act to establish the Communication Service Tax, which the Senator had formally introduced on the floor of the Senate on Wednesday, a proposal that has already passed first reading in the Parliament.
He said: “I feel that increase in VAT is going to have a spiral effect; and it is going to affect the poor more.
“It is true the government is not expanding the revenue base or the tax.., that is why I am thinking that anybody that is using telephone here would want to just talk and pay for it of course but right now, none of you will say this is what I am paying for telephone; if it tells you one minute remaining, you start looking for any recharge card.
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“But if you are tasked on that, you won’t say you want to talk again because you are tasked.
“The effect will be that every commodity, even transportation from one point to another will increase and who is going to pay or who is going to feel it more; it is the poor; so that is why I am saying that we should introduce Communications Service Tax and people will pay for it sometimes even not knowing.”
He explained that through the property and communications tax, the government will be able to generate more revenue.
“Do you know the money the service providers are making out of communications?
“So, that is why I sponsored that Bill at the last senate but it didn’t… because of time and of course service providers opposed that.”
On property tax bill, he said, “Let me add one thing, yes we have a government, the tax should be paid by those who can, who should or can afford that tax.
“Like in Abuja now, you see so much property, if you value them, property tax is something not paid. I am not paying too simply because nobody is paying, nobody asked me to pay.
“In Nigeria, for example, the resources is in the hands of few people. Why don’t you tax these few people instead of going to tax the poor man that is trying to survive?
“So, this is my position and I think this Communications Service Tax is part of it. Ask those that can afford telephone, 60 million of them; why do tax 200 million people? Tax the 60 people that can afford it and you get what you want.”
The lawmaker said “I am working on property tax bill not only that, I am working on another bill…maybe it will not see the light of the day. People are having what they can’t explain, they should be asked.
“The burden of proof should be on that person. If I have a mansion and my income as a senator does not commensurate with that, if you want to fight corruption, you put the burden on me to prove where I got that money.
“In Britain nowadays, it is called Unexplained Wealth Order (UWO), I am working on that too, that if you own a car, you explain how you got it, because of that, if you don’t know where to go with what you steal that doesn’t belong to you, you don’t even start,” he said.
Ndume also spoke on the proposed reintroduction of toll gates on Nigerian highways.
He said “You see, the state of our infrastructure is of concern; there is virtually collapse in our infrastructure; if the purpose for which the toll gates will be placed will serve the objective of keeping the roads not only motorable but effective and safe.
“Like the Abuja-Kaduna road for example, where there is toll gate, you will be able to place security there and if you place these people there, you have to pay them.
“I am sure every Nigerian travelling, for example, say from Lagos to Ibadan, if you say he is going to pay N100 or N12 to 50 at each point in four places to assure that number one, the road is good; number two, he will be safe; he can drive without expecting anybody to come and close the road and kidnap or rob anybody, it makes sense to me but for the toll gate to be placed just for the purpose of it, I don’t think that is what the government wants to do.
“Besides, I heard the minister say that they are bringing private partnership into it; and that is also good,” he said.
The lawmaker who explained that the meeting between him and the vice president was private, said it afforded him the opportunity to brief the Vice President on the humanitarian crisis in his home state of Borno.
“I am here to see the vice president and for some of you that have been here for a while, you know that I come from time to time; I have a relationship, very personal with the vice president; just like the president too.
“More especially, I come to brief him from time to time on the humanitarian crisis that we are facing because the vice president is personally passionate about it. You know what he did for us; he has an orphanage that is running very effectively in my area; accommodating over 2000 orphans.
“I normally come to discuss with him; he is always very curious about what is going on; so I came to adequately brief him; and of course, you know, in the course of that kind of discussion, you discuss other things which are private and personal,” he added.