VAT Exemption On Some Food Items Good But Not Enough, Stakeholders Tell FG

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Lagos – There is a consensus of commendations for the Federal Government on its move on the exemption of 20 basic food items from Value Added Tax (VAT), but they have also posited that it is not good enough to exempt the items. Rather, infrastructures and enabling environment must be put in place for it to really trickle down to the average Nigerians.

Most of the stakeholders in separate interviews with DAILY INDEPENDENT, said though the gesture is a right step in the right direction ,but wondered how it would be implemented since VAT are only paid on these items if bought in the supermarket and malls and not in the open market.  

Muftau Oyelekan, Lagos State immediate past President of the Federated FADAMA Community Association and a vegetable farmer stated that it is a good move in the right direction if those items are exempted from VAT, stressing that it would definitely have a positive effect on purchasing power of consumers and equally encourage industrial output because almost all the items are commonly used on a daily basis.

Oyelekan further said that the exemption is farmers-friendly, that it will encourage more production.

“I think it is a good move in a right direction, if these items are exempted from VAT, it would definitely have a positive effect on purchasing power of Nigerians and equally encourage industrial output, because almost all the items are commonly used on a daily basis.

Pastor Adeola Elliot, a fish farmer in his view, noted that it is interesting that the government of President Buhari is sensitive to the cries of the populace.

“Abinitio, one does not expect staple food to be subjected to VAT payment. It is normal that luxury items must attract high VAT. It is a process of re-distributing wealth. The accidental rich in Nigeria, who made their money by fraudulent means are supposed to be made to pay high VAT. Hardly will you see rich people by dint of hard work in this country.

Elliot said that Buhari’s government should increase VAT on luxury items purchasable by the rich, as it is said that Nigeria’s VAT is the lowest, and that VAT should be raised on luxurious items, if Buhari’s government is sincere about making life meaningful for the masses.

“Buhari’s government should increase VAT on luxury items purchasable by the rich, as it is said that Nigeria’s VAT is the lowest. VAT should be raised on luxury items, if Buhari’s government is sincere about making life meaningful for the masses.

“As a matter of impudence, all food items that are poor- people-oriented must be free from VAT. Also, other items classified as poor man items must not attract VAT at all.

“The government should introduce a policy that will restrict the rich from having access to such items. It is easy to control, as the poor cannot buy large quantity of a particular item, no matter the cheapness. It is only the stupendous rich who can buy in dozens, except the poor who retails,” he added.

Speaking further, he said that the officials in government must do more in this decade to ameliorate the pains of Nigerians.

“We must commend the President and those who are leading him in the right way, such as in this VAT exemption,” he said.

Edobong Akpabio, Agropreneur and a Business Consultant in her view said that it is a good development that the government just needs to be clear about certain things. 

She wondered if those items that are bought from the supermarkets, will require the buyer to pay VAT.

Prince Wale Oyekoya, Agriculturalist cum Public Analyst stated that the initiative is a good gesture from the Federal Government, but that there must be improvement in the nation’s decayed infrastructures, if the initiative will really improve the standard of living in Nigeria.

He lamented that things have really fallen apart with the standard of living in the country as average Nigerians cannot afford three square meals, saying that those in the northern part of the country are the most vulnerable to government’s I-don’t- care attitudes- to- human life.

 “You will pity the northerners’ children and women when you visit the place where they lined up all the time on the streets begging for food. Nigerian citizens are ready to pay their VAT if proper measures are put in place for their businesses to thrive.

Oyekoya said that the cost of doing business in Nigeria is extremely high even with the zero tax, adding that things are not easy at all in Nigeria especially people that are into business and more particularly people on production that rely on electricity to produce.

“All Nigeria roads are death traps like a war zone as we don’t have good roads anywhere in Nigeria apart from the cosmetics done on the highways.

“It is easy to lose one life on Nigeria roads faster than the Sambisa forest because the bandits, kidnappers, armed robbers, herdsmen take advantage of our bad roads to perpetrate their crimes on Nigeria citizens,” he said.

He added that the bad roads affect farmers or produced goods to come to the market, that if all these challenges can be tackled, people will be willing to pay their taxes as taxes is supposed to come from profits of their business.

Speaking further, he said that funding of businesses is another big issue with the nation’s commercial banks, that bank interest rate now is not less than 26 per cent  and as high as 30 per cent.

“All the government intervention funds are not getting to the real business sector but instead, it disappeared into the pockets and accounts of the government officials and political farmers.

Oyekoya noted that Nigeria will not have degenerated into banana republic if all the loans been taking by the government are properly spent on the nation’s infrastructures and in developing its mineral resources.

“Nigeria will not have degenerated into banana republic if all the money and loans been taken by our government are properly spent on our infrastructures and developing our mineral resources.

“Our internal and external debt is over N25trillion and Nigerians wonders where all these money disappeared to.

He therefor, advised government at all levels to take governance serious, and stop wasting the meager resources on immaterial and frivolous things as well as reduce the size and expenses of government spending on recurrent expenditures and spend up to 80 percent on capital expenditure to bring meaningful development into the country.

“My advice to the three tiers of government is to take governance serious, stop wasting our meager resources on immaterial and frivolous things, reduce the size and expenses of government spending on recurrent expenditures and spend up to 80 percent on capital expenditure to bring meaningful development into the country.

“Improve on our power supply as without power, we cannot improve on our economy and human development. Reduce the salaries of our so called leaders as they are not living by example, they have turned Nigerians to monkey-dey-work, baboon-dey-chop,” he added.

Ezekiel Ibrahim, National President, Poultry Association of Nigeria (PAN), said that poultry is one of the basic food items and it is a right step in the right direction.

He said that food is one thing that people cannot do without and that what is used on food by an average Nigerian is huge if VAT is included considering the disposable income of an average Nigerian.

“We cannot afford not to eat; the best thing for any nation is to ensure that food is available for its citizenry at a cheaper rate and more importantly poultry, which is one of the cheapest animal protein sources.

“It is necessary especially in a population that we are having challenge of malnutrition. Cheaper poultry, if available will address the challenge of malnutrition in the country.

Ibrahim while commending and appreciating the Federal Government on the gesture, said that the exemption of poultry from VAT will also allow for more production and that if there is increase in production, there will be employment generation in that line.

However, Nurudeen Tiamiyu, National Vice President, Tilapia Aquaculture Developers Association of Nigeria (TADAN), said that the listed food items don’t carry VAT except those sold in malls and grocery stores.

“Are they saying they would exempt them from VAT when also sold in stores like we have now? It is playing to the gallery when they make pronouncement like these. We only pay VAT on these items when we buy them in shops not open markets,” he said.

It would be recalled that the Federal Government has exempted basic food items such as additives (honey), bread, cereals, cooking oils, culinary herbs, fish, flour and starch, fruits (fresh or dried), live or raw meat and poultry, milk, nuts, pulses, roots, salt, vegetables, water (natural water and table water) from the Value Added Tax.

The gesture according to the Federal government was aimed at reducing the cost of living of Nigerians.

The statement explained that the new VAT rate of 7.5% is still the lowest in Africa, and one of the lowest anywhere in the world when compared to South Africa VAT: 15%; Ghana: 12.5%; Kenya: 16%; Egypt: 14%; Rwanda: 18%, and Senegal: 18%.

Read Original Report Here By Independent

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