We Can Jettison Proposed VAT Reforms, Retain Status Quo, Says Tinubu's Tax Committee
- The Presidential Committee on Tax Reforms has said that the country could stick to the existing VAT structure, and jettison the reform
- Oyedele noted that contrary to public opinion, the proposed VAT structure benefits every part of the country
- He noted also that the tax reforms are necessary, as there is no constitutional backing for the current status quo
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Chairman of the Presidential Committee on Fiscal Policy Tax Reforms, Mr Taiwo Oyedele, has said that the committee can jettison the proposed VAT reforms and stick to the existing structure.
He stated that while the Tax Reform was non-negotiable, the specific details were subject to modification as consultations progressed.
Source: UGC
Speaking live on Arise Television, Oyedele noted that of the four Tax Reform Bills presented to the National Assembly, the VAT reforms, too, face stiff opposition from regions and groups that perceive them as against their interests.
He, however, insisted that the proposed bill would benefit every region in the country, the PUNCH reports.
Oyedele said;
“The President’s point is that we have to carry out tax reform. That is what is non-negotiable, otherwise, we will be missing out on a significant opportunity to move Nigeria forward. But in terms of the details of those bills, everything is up for grabs. I can tell you, as we speak today, if they want us to keep the current VAT formula, we’ll keep it 100 per cent.”
Oyedele expressed his puzzlement that people keep accusing the committee of trying to create the exact problems that the reform is intended to solve.
He noted that some of these confusions result from people not understanding the law's current position and what the reforms seek to address. Thus, he encouraged people to read the bills rather than depend on social media conversations.
No VAT in the Nigerian constitution
Tracing the history of Nigeria's tax laws, Mr Taiwo Oyedele recalled that when the 1999 constitution was put together, they merely replicated the 1979 constitution, which had no provisions for VAT collection.
Despite this, the government continued to collect VAT following the 1993 military decree that introduced VAT to replace Sales Tax.
He said this is why the President has insisted that the Tax Reforms are necessary.
Oyedele added that Lagos and Rivers states had instituted court cases to allow states to collect VAT directly, but that would result in a 100 per cent derivative, and that is what the Tax reform seeks to prevent.
He explained:
“As of today, when companies remit their VAT, they tend to remit from their head office because that’s where they have the finance department. So MTN, BUA, Dangote, Airtel, all the banks, most of them are headquartered in Lagos, while some of the oil companies are headquartered in Rivers State."
How VAT reforms benefit manufacturers
In a recent post, Legit. ng reported that the new VAT reforms will reduce Nigerian manufacturers' budget.
Mr Oyedele demonstrated in his breakdown how the new VAT will translate to lesser expenditure for Nigerian manufacturers.
He also explained that where they incur expenses with the accompanying, such VAT is reclaimable under the new bill.
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Source: Legit.ng
