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FIRS refutes 50 per cent VAT increase report

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It’ll worsen economic situation – Umahi

 

FEDERAL Inland Revenue Service (FIRS) ,yesterday, refuted report of planned increment of Value Added Tax (VAT) by 50 per cent to meet up payment of the newly proposed minimum wage.

This was disclosed by the Head, Communication and Servicom Department, Mr Wahab Gbadamosi,  in Abuja.

The Minister of Budget and National Planning, Sen. Udo Udoma and Dr Babatunde Fowler, FIRS Chairman, had appeared before Senate Committee on Finance at the 2019-2021 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper ((PSP) interactive meeting on Tuesday.

Gbadamosi explained that at the meeting, Fowler had called for an increase in the number of Nigerians and companies paying VAT and not a 50 per cent increase in VAT rate as reported.

He said that contrary to reports in the media, the FIRS Chairman called for a reduction in Companies Income Tax (CIT) rate for small businesses so as to improve compliance.

“Though he indicated that there should be an increase in VAT rate by the end of the year, he never for once suggested a 50 per cent hike of any percentage increase at all.

“Rather, he promised improved collection in CIT, Petroleum Profits Tax, PPT and VAT in 2019 relative to the collection performance of the Service in 2018,” he said.

In a related development, Ebonyi State Governor David Umahi , yesterday said the plan by the federal government to lift Value Added Tax( VAT ) from 5% to 35% to pay salaries will not solve any problem but rather worsen the situation.

The plan, he said would  make things more difficult for Nigerians as it will lead to astronomical increment of goods and services in the country.

He described the alleged plan as digging a hole to fill a hole and therefore called on Organised Labour to sit down with government to consider the plan.

Umahi spoke in his office at government house Abakaliki while addressing the staff of his office celebrating his re-election victory.

He noted that with the proposed plan by the federal government, anyone going to buy something will pay 30% VAT than it used to be.

“I saw in a paper where federal government is considering lifting VAT to 35% to pay salaries.

“It is all about digging a hole to fill a hole because we have not come to point of realisation or honesty about how to solve our problems and it is important…”

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