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Tag: VAT

  • Why cost of cooking gas is skyrocketing

    Why cost of cooking gas is skyrocketing

    The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) has explained that the reintroduction of value added tax (VAT) on Liquefied Petroleum Gas (LPG), also known as cooking gas, is the reason why the cost of the commodity is skyrocketing.

    TheNewsGuru.com (TNG) reports Mr Bassey Essien, Executive Secretary, NALPGAM, who made this known in Lagos State, said the rising trend in the cost of cooking gas will continue if the Federal Inland Revenue Service (FIRS) and the Federal Ministry of Finance do not stop the VAT policy.

    Recall that the federal government had in 2019 gazetted the removal of VAT on Liquefied Petroleum Gas (LPG), also known as cooking gas, as a product to increase its domestic utilisation.

    Essien, appealing to the Federal Government to reconsider the imposition of Value Added Tax on imported LPG in the country, said the reintroduction of the policy would further increase the prices of cooking gas across the country.

    “It is unfortunate that the Federal Inland Revenue Service and the Federal Ministry of Finance have gone to resuscitate a product that has been exempted and gazetted from VAT.

    “This was gazetted in 2019 and has encouraged domestic gas utilisation.

    “Nigerians are already complaining about the prices of cooking gas across the country and this would further worsen the situation,’’ he said.

    Essien noted that while the government was desirous of expanding its revenue base, it should also consider the impact the reintroduction of VAT on importation of LPG would have in the country.

    “The government has declared the Year 2021 to Year 2030 as the Decade of Gas in Nigeria with the goal of deepening gas utilisation.

    “However, this goal will be defeated if cooking gas goes out of the reach of ordinary Nigerians due to the current increment in prices of the commodity.

    “The price of 12.5kg cylinder of cooking gas is between N6,000 to N6,500 across the country. It was being sold for about N4,000 averagely a few months back,’’ Essien said.

    He said more than one million metric tonnes of gas were consumed by Nigerians in 2020, with about 60 per cent of the product imported by marketers.

    According to him, “we import to augment the 350,000MT allocated to the domestic market by the Nigerian LNG Company Limited.

    “So putting VAT on it simply means that Nigerians will pay more and if we go on this route, the price of 12.5kg might hit N10,000 in some parts of the country by December.’’

    He further noted that some users of cooking gas were gradually reverting to the use of kerosene and firewood with the attendant health implications.

    However, Mr Sarki Auwalu, Director, Department of Petroleum Resources (DPR), said the government had to re-impose VAT on imported LPG to attract investments to local gas production.

    “For me personally, I wouldn’t like us to be importing LPG. This is a country that has over 600TCF of gas. We have proven reserves of 206TCF.

    “If you allow LPG to be imported without any restriction, it means you are not giving opportunity for upstream investors that will drill and get this gas.

    “Nigeria gas is sweet and rich. Sweet means that there is no sulphur. Rich means that it is rich in liquid. Anywhere you see gas in Nigeria, you can extract condensates out of it which is another input to the industry.

    “You can extract propane, then you extract the LPG butane. So it is this LPG butane that they are bringing in because it is easier to go and buy and sell it here, especially with no payment of VAT.”

    According to him, the removal of 7.5 per cent VAT on LPG importation is a discouragement for potential investors in the upstream sector which transcends to double losses for the government.

    “Government is losing through VAT and losing investors which are double jeopardy. So for us, it is a policy to encourage the inflow of investment in the gas sector,’’ he said.

    Auwalu added that initiatives such as the Nigerian Gas Transportation Network Code and the Nigerian Gas Flare Commercialisation Programme were geared towards attracting investments to the industry.

  • VAT increase by N15.86bn in Q2 – NBS

    VAT increase by N15.86bn in Q2 – NBS

    Nigeria recorded an increase of N15.86 billion Value Added Tax (VAT) revenue from N496.39 billion generated in quarter one (Q1, 2021) to N512.25 billion in Q2.

    This is contained in the National Bureau of Statistics’ (NBS) “Sectoral Distribution of VAT Data for Q2, 2021’’, obtained on Tuesday in Abuja.

    It said the N512.25 billion generated in Q2 as against what was generated in Q1 and N327.20 billion generated in Q2 2020 represented 3.20 per cent increase quarter-on-quarter and 56.56 per cent increase year-on-year.

    The NBS said that manufacturing sector generated the highest amount of VAT with N44.89 billion and closely followed by professional services, N29.30 billion.

    “Commercial and trading generated N21.96 billion while textile and garment industry generated the least at N77.74 million closely followed by pioneering and pharmaceutical with N169 million and soaps and toiletries generated N188.71 million.”

    “Agricultural and plantations generated N760.02 million, automobiles and assemblies N868.06 million, banks and financial institutions N7.712 billion, breweries, bottling and beverages N3.47 billion, while building and construction accounted for N2.78 billion.

    It added that Federal Ministries and Parastatals accounted for N5.22 billion, hotels and catering N3.24 billion, Local Government Councils N399.91 million, Mining N8.11 billion and State Ministries and Parastatals N18.41 billion.

    The NBS said out of the total amount generated in Q2 2021, N187.43 billion was generated as non-import VAT locally, while N207.69 billion was generated as non-import VAT for foreign.

    It added that the balance of N117.13 billion was generated as Nigeria Customs Service-import VAT.

    The data for the report was provided by the Federal Inland Revenue Service (FIRS), verified and validated by the NBS.

  • Court declares Rivers, not FG should collect VAT, income taxes, others

    Court declares Rivers, not FG should collect VAT, income taxes, others

    The Federal High Court sitting in Port Harcourt has declared Rivers Government, not the Federal Inland Revenue Services (FIRS) should collect the Valued Added Tax (VAT) and Personal Income Tax (PIT) in the State.

    The Court presided over by Justice Stephen Dalyop Pam also issued an order of perpetual injunction restraining the Federal Inland Revenue Service and the Attorney-General of the Federation, both first and second defendants in the suit, from collecting, demanding, threatening and intimidating residents of Rivers State to pay to FIRS, personnel income tax and VAT.

    Justice Pam made the declaration while delivering judgement in suit No. FHC/PH/CS/149/2020, filed by the Attorney-General for Rivers State (plaintiff), against the FIRS (first defendant) and the Attorney-General of the Federation (second defendant).

    The court, which granted all the eleven reliefs sought by the Rivers State Government, stated that there was no constitutional basis for the FIRS to demand for and collect VAT, Withholding Tax, Education Tax and Technology levy in Rivers State or any other state of the Federation

    Pam said the constitutional powers and competence of the Federal Government was limited to taxation of incomes, profits and capital gains, which did not include VAT or any other species of sales, or levy other than those specifically mentioned in items 58 and 59 of the Exclusive Legislative List of the Constitution.

    The judge dismissed the preliminary objections filed by the defendants that the court lacked the jurisdiction to hear the suit and that the case should be transferred to Court of Appeal for interpretation.

    Justice Pam, who also dismissed objection raised by the defendants that the National Assembly ought to have been made a party in the suit, declared that the issues of taxes raised by the state government were the matters of law that the court was constitutionally empowered to entertain.

    He declared that after a diligent review of the issues raised by the plaintiff and the defendants, the plaintiff had proven beyond doubt that it was entitled to all the eleven reliefs it sought in the suit.

    The Court agreed with the Rivers State Government that it was the state and not FIRS that was constitutionally entitled to impose taxes enforceable or collectable in its territory of the nature of consumption or sales tax, VAT, education and other taxes or levies, other than the taxes and duties specifically reserved for the Federal Government by items 58 and 59 of Part 1 of the Second Schedule of the 1999 constitution as amended.

    Donald Chika Denwigwe, SAN (middle) lead lawyer to Government of Rivers State and Ken C.O. Njemanze, SAN (left) briefing journalists after the Federal High Court in Port Harcourt on Monday declared FIRS collection of Value Added Tax in Rivers State unconstitutional.

  • PDP stalwart seeks VAT reversal to 5%

    PDP stalwart seeks VAT reversal to 5%

    A PDP stalwart, Dr Nnamdi Onochie, has advised the Federal Government to reverse the Value Added Tax (VAT) from the current 7.5 per cent to five per cent, due to current inflation trends in the country.

    In a statement issued in Abuja on Sunday, Onochie contended that retaining VAT at 7.5 per cent would do more harm than good to the populace in view of current economic hardships.

    He argued that it had become necessary for government to carry out measures to lift the human condition of the populace, amid rising unemployment, especially among the younger segment of the population.

    Onochie observed that seeking foreign loans from time to time might not be the way out for the country, saying macro-economic measures should be adopted to pull Nigeria out of the woods rather than resorting to loans.

    “The present administration has largely been borrowing foreign loans and introducing harsh tax methods that have impacted negatively on the populace.

    “I submit that this is not the way to go and I’m hopeful that the people will see the difference in 2023, if I become part of the new regime that will bring change,’’ he said.

    Onochie, who was a former Commissioner for Special Duties in Delta, recommended what he described as an open governance that would tackle corruption decisively.

    He said that technology was the best tool to fight corruption, to ensure that graft was tackled even before it would take place.

    The former Nigerian envoy to Algeria and the Philippines, stated that any administration keen on fighting corruption should deploy soft wares at all levels of governance to prevent contract over-invoicing and other fraudulent transactions.

    “If elected president, I will fully deploy soft wares and state-of-the art technology that will centralise and manage all government procurement, purchases and contract businesses,’’ he said.

    According to him, centralising government procurements will detect insertions of fraud, flag and deter continuation or conclusion of processes, including financial wastes and profligacy.

    He lamented the persistent rating of Nigeria as a nation with high corrupt index by international agencies, including Transparency International.

    Onochie challenged the ruling APC to make visible impact on the war against corruption since the regime came to power six years ago.

    “The most impactful approach to fighting corruption is to prevent it before it happens thereby eliminating corruption to zero level,’’ he said.

    Onochie, however, appealed to Nigerians to support government in the bid to make thd country to rank high in the comity of nations.

  • VAT increases by N29.98bn in fourth quarter of 2020 — NBS

    VAT increases by N29.98bn in fourth quarter of 2020 — NBS

    The National Bureau of Statistics (NBS) says Value Added Tax (VAT) increased by N29.98 billion from N424.71 billion generated in third quarter to N454.69 billion in fourth quarter, 2020 (Q4 2020).

    The NBS said this in its “Sectoral Distribution of Value Added Tax (Q4 2020)” obtained from its website on Wednesday in Abuja.
    The bureau said that the figure represents 7.06 per cent increase Quarter-on-Quarter and 47.39 per cent increase Year-on-Year from the N308.48 billion generated in Q4 2019.

    The report said that professional services generated the highest amount of VAT with N42.38 billion generated and closely followed by other manufacturing generating N39.45 billion, while commercial and trading generated N21.15 billion.

    “Mining generated the least with N58.88 million and closely followed by pioneering and textile which generated N185.72 million, while the garment industry generated N353.75 million.

    “Out of the total amount generated in Q4 2020, N212.52 billion was generated as Non-Import VAT locally while N143.35 billion was generated as Non-Import VAT for foreign.

    “The balance of N98.81 billion was generated as Nigeria Customs Service-Import VAT”, it added.

    Meanwhile, for Company Income Tax (CIT) by Sectors for the period under review, the NBS stated that N295.72 billion was generated as against N416.01 billion generated in third quarter.

    It added that the figure represents -28.91 per cent decrease Quarter-on-Quarter and -18.31 per cent decrease Year-on-Year from the N362.01 billion generated in Q4 2019.

    According to it, professional services, including telecoms, generated the highest amount of CIT with N32.17 billion generated.

    “This was closely followed by other manufacturing generating N25.64 billion, commercial and trading generating N19.41 billion.

    “Textile and garment industry generated the least with N104.37 million, closely followed by mining with N136.99 million and Local Government Councils with N298.73 million generated.”

    The report said that out of the total amount generated in Q4 2020, N162 billion was generated as CIT locally while N63.52 billion was generated as foreign CIT payment.

    It added that the balance of N70.20 billion was generated as CIT from other payments.

    The data was provided by the Federal Inland Revenue Service (FIRS) and verified and validated by the NBS.

  • VAT yesterday, today and forever – Dele Sobowale

    By Dele Sobowale

    “FG, States, LGs share N601bn for November.” News Report, December 2020.

    Truth is constant; and wisdom is enduring. The amount shared by the three tiers of government for November, which will determine whether or not public servants will be fully paid their salaries for December 2020, is 14 per cent less than the N700bn monthly revenue which the Federal Government announced in 2018 that will be required for governments to meet their obligations to workers. Then, Minimum Wage was N18,000 per month; it is now N30,000 per month.

    When President Buhari signed Minimum Wage Bill into law in 2019, with firm instructions for immediate implementation, some of us consulted our economic forecasting models and concluded that Buhari, the National Assembly and the State Governors were deceiving workers. The Nigeria Labour Congress, NLC, and other allied union groups assumed they were victorious. One of their best and brightest even proclaimed that Governors failing to pay will be prosecuted and jailed. We were certain that it was all a mirage. Governments will find it almost impossible — to pay the new wages. Nobody would be prosecuted.

    “There are only two families in the world, my old grandmother used to say; the Haves and the Have-nots.” Miguel de Cervantes, 1547-1616.

    As you are reading this article, four days to Christmas, millions of public servants in most states have no idea how much – if anything – they will take home for the Yuletide. Christmas 2020 already promises to top those of the past four years for dreariness and a pervasive sense of deprivation. Life, for most Nigerians has never been so bad and so sad. More millions of Nigerians have slipped into abject poverty than the same period last year.

    At 77+, I am nobody’s grandmother, but rightfully a grandfather to millions of Nigerian kids. And, I can state authoritatively that never in Nigerian history has the dividing line between Haves and Have-nots been so sharp in this country. That, in part, has created the battle lines nationwide – especially in the North. All over the nation, the poor are no longer begging. They are demanding by violence for a greater share of the national wealth. A war has started between the Haves, especially those in top public service positions, and the Have-nots.

    VAT PROVIDES A SILVER LINING

    “The total distributable revenue of N601.1bn comprised statutory revenue of N436bn; Value Added Tax revenue of N156.79bn…”

    Permit me to congratulate the FG for the historical achievement on the VAT revenue collection. For once, the FG listened to professional advice; took courage and increased VAT from 5 per cent to 7.5 per cent despite the hysterical objections of the NLC and other ill-informed commentators. Let me explain the breakthrough which the Buhari administration has achieved by this — for the sake of those who might not recognise the significance of that statement.

    Hitherto, VAT as a percentage of distributable revenue has hovered between 8 and 10 per cent. But, in November 2020, VAT contributed a whopping 26 per cent of the total – about 160-200 per cent increase. Furthermore, while statutory revenue declined precipitously, VAT rose astronomically to partly make up the difference. As an unrepentant promoter of VAT, I challenge any of its opponents to ask the FG and state Governors to return 26 per cent of the November allocation because VAT is unacceptable. There is no doubt in my mind that nobody will listen to them – now that everybody has seen the benefits of VAT as a more reliable revenue generator than crude oil has become; and will turn out to be in 2021. Here is why.

    “Nigeria’s daily oil production falls to 1.32 million barrels” News Report.

    Budget 2021 will kick off in nine days time. Already, there is a lot of bad news portending another disastrous year. Since, our country is apparently incurably hooked on crude oil revenue and the FG cannot think of any other options, we are forced to examine first the implications of 1.32 million barrels per day production. Unless there is sudden change in production volume, the report indicates that we will only achieve 57 per cent volume projected in the budget. That will mean that the country will be running a negative variance in revenue, foreign exchange earnings, debt-to-revenue ratio and expected deficits etc from the first month of next year. The governments now finding it difficult to pay workers will be in more distress than ever before. In that case, VAT will play an increasing role in our revenue-generation effort. In that connection, we might need to revisit VAT first, and then consider a more radical approach to raising funds for our governments.

    LEE KUAN YEW AND SAUDI LESSONS WE SHOULD NOT IGNORE.

    “The world does not owe us a living; we cannot live by the begging bowl.” That was what Yew, 1923-2015, said when he became Prime Minister of a nation without natural resources; but which today makes Nigeria look sick with our abundant resources. Beggars are always treated with disdain globally. So we have no reason to expect respect. To restore our national pride, we should throw away the begging bowl and look more inwards for hidden funds to develop our country. There are still a few untapped possibilities – two of which could add N1tn to our revenue next year and set us on our way to self-reliance.

    But, we have not exploited the potentials of VAT enough. As it is, left untouched VAT will deliver close to N1.5tn in 2021. We can adjust it and collect N500bn more. That amount should keep the universities opened annually – if given to them and stimulate aggregate consumption and production as well. For this purpose, we need to revisit the example of Saudi Arabia, a richer oil producing country which went farther with VAT and is scooping the rewards. I recall part of an article published earlier this year as COVID-19 was just showing its ugly head. The points made then remain just as valid today. We need to be tougher with ourselves to survive.

    “Saudi Arabia triples VAT to support Coronavirus-hit economy”.

    BBC NEWS, BUSINESS, MAY 11, 2020.

    The news report went on to explain why Saudi Arabia, a nation many Nigerians assume has no financial and economic problems, has turned its attention to increasing the Value Added Tax, VAT, as an option for achieving macro-economic stability in the next three to ten years.

    “Saudi Arabia is tripling its value added tax (VAT) as part of austerity measures to support its coronavirus-hit economy….Saudi Arabia’s state news agency said VAT will increase from 5% to 15% as of 1 July…These measures are painful but necessary to maintain financial and economic stability over the medium to long term.”

    It is not only the sense of responsibility of the Saudi economic policy managers that one finds commendable. While Nigeria increased from 5% to 7.5%, the courageous Saudis went from 5% to 15%. The President of Nigeria had been under attack for a mere 50% VAT increase; the Saudi leader will most probably not receive any abuse by economic illiterates and academicians because the people are better educated, more patriotic and can see the temporary inconvenience as part of the price they have to pay for 200% increase.”

  • FG speaks on alleged plans to increase VAT, others

    FG speaks on alleged plans to increase VAT, others

    The Federal Government has refuted speculations it plans to increase the Value Added Tax (VAT) and other taxes in its proposed Finance Bill.

    Minister of Finance, Zainab Ahmed, who spoke while defending the Ministry’s budget before the Senate Committee on Finance in Abuja, dismissed the claims of an imminent increase in VAT and other taxes in the proposed Finance Bill to be presented to the National Assembly soon.

    Recall that implementation of the increase in VAT from five per cent to 7.5 per cent took off in January 2020 after President Muhammadu Buhari signed the Finance Bill, 2019 into law.

    Ahmed said: “There will be no increase in VAT or any form of taxes because we see 2021 as a year of recovery – not only for government but businesses as well.”

    Account General of the Federation, Ahmed Idris, who was also at the session, complained about poor budgetary allocation to his office.

    Idris said: “We have 37 offices all in dire need of rehabilitation. In particular, the Mosaic House in Lagos where the office of the Accountant General was sited before. That office is a huge property that can be utilised to generate revenue.

    “It is being occupied by unwanted elements. If it is rehabilitated, it will go a long way in boosting revenue because it is in the heart of the commercial city.

    “We are grossly underfunded. We are being treated like any other MDA. We know the constraints but we can be better in terms of our ability to meet expectations and needs of the Nigerian economy.”

    Idris put the 2021 budget estimates for Personnel at N3.9 billion, Capital Expenditure at N483 million and Overhead at N752 million.

    Members of the Senate Committee on Finance also expressed concerns over the claimed underfunding of the AGF’s office.

    Asked if the office of the AGF has software to monitor revenue coming to the coffers of the government on a real time basis, Idris said although they do not have, they take revenues from the accounts of agencies.

    “We don’t have any. There is an ongoing effort in the revenue and financial department of my office to put in place a solution.

    “It is just a proposal. All the revenue accounts of agencies of government on TSA, are visible to our office.

    “The AGF takes revenue directly from TSA accounts of agencies because these are agencies that don’t remit revenues as at when due,” Idris said.

    The Chairman of the Committee, Senator Solomon Adeola, called for multiple payment platforms that will serve as alternative to the Remitta payment system currently in use.

    Adeola said that the Senate was ready to work with the Office of the Accountant General to bring on board new payment systems players to end the current monopoly being enjoyed by Systems Specs – operators of the Remitta payment platform.

  • NCC, FIRS sign MOU for ascertaining VAT elements of telcos’ transactions

    The Nigerian Communications Commission (NCC), has signed a Memorandum of Understanding (MOU) with the Federal Inland Revenue Service (FIRS).

    This is to ensure the tax agency ascertained accuracy and completeness of value added tax (VAT) elements and other taxes payable in the transactions of telecoms operators.

    A statement signed by Dr Henry Nkemadu, Director, public Affairs of NCC, in Abuja, said that the MOU was in line with the commission’s inter-agency collaboration, quoting the Executive Vice Chairman of NCC, Prof. Umar Danbatta.

    Danbatta said that diligence and appropriate due processes were undertaken to conclude the MOU, as the Commission took its time to understand the import of the MOU.

    “Our concern, as Regulator of the telecoms industry, is that we needed to be sure that it is not another way to tax telecoms operators, who are already dealing with multiple taxation issues.

    “We have also ensured that the integration of the solutions with telcos’ transactions systems will not, in any way, impact the cost and quality of service delivery by the operators to telecoms consumers.”

    Danbatta, therefore, assured telecoms consumers and stakeholders that the integration with the operators’ systems was entirely to ascertain the accuracy of the VAT elements being paid by the operators on their transactions.

    He noted that it would not, in any way, degrade the quality of service delivery or lead to high cost of service to the consumers.

    The Executive Chairman, FIRS, Muhammad Nami, explained that the MOU was mainly to ascertain completeness of tax transactions of mobile service providers to the Federal Government.

    This is due to the shift of physical businesses to electronic-based business activities.

    Nami expressed delight and thanked the NCC for accepting to collaborate with the tax agency.

    “With the MOU, the FIRS will be able to integrate an application programming interface (API) technology solution with the systems of telecom operators.

    “This is for independent verification of the amount of VAT that should be paid by mobile network operators (MNO) rather than relying entirely on the operators’ books of accounts,” he said.

  • COVID-19: FG dashes Nigerians’ hope of VAT reduction

    COVID-19: FG dashes Nigerians’ hope of VAT reduction

    The federal government of Nigeria has told residents of the country to erase the idea of reduction in the value added tax (VAT) paid on products and services.

    Secretary to the Government of the Federation (SGF), Mr Boss Mustapha, while speaking at the daily briefing on COVID-19 in Abuja on Friday, said government will not consider the request at this critical time.

    He said the global health crisis has affected prices of crude oil at the international market, reducing the revenue generated from the sale of the product.

    Nigeria, which is Africa’s largest producer of crude oil, generates over 80 percent of its foreign earnings from the commodity.

    In the 2020 budget, the oil benchmark was first fixed at $57 per barrel, but the crash in prices forced a downward review of the yardstick to $30 per barrel.

    However, prices further declined at the market to around $17 before selling at the moment between $20 to $30 per barrel.

    It is believed that the lower prices of the commodity will pose a huge challenge to the 2020 budget and just a while ago, the International Monetary Fund (IMF) said Nigeria could lose over $26 billion from crude oil exports.

    With companies struggling to stay afloat due to the Coronavirus pandemic and many Nigerians expected to lose their jobs, government has been urged to reduce the VAT, which was recently hiked to 7.5 percent in 2020 from 5 percent.

    But addressing the matter yesterday, Mr Mustapha, who was appointed by President Muhammadu Buhari as Chairman of the Presidential Task Force (PTF) on COVID-19, stated that the VAT rate cannot be tampered with at this time.

    He said the collection of the tax was mainly the alternative source of revenue for government, stressing that only 15 percent of the VAT goes to the federal government, while the remaining 85 percent is shared between the states and local governments.

    “Let me say that it would be difficult for government to reduce VAT at this moment because of the current situation.

    “What we get from crude oil is very low and tax revenue is the other source of income for government.

    “We have to understand that only 15 percent of the VAT comes to the federal government, while the remaining 85 percent goes to the state and local governments. This is the situation we found ourselves,” Mr Mustapha said.

  • Nigerians lament call rates as 7.5% VAT increase bites hard

    Nigerians lament call rates as 7.5% VAT increase bites hard

    As the new Value Added Tax (VAT) regime takes full effect, 7.5 VAT is now being applied to phone calls and Short Message Services (SMS), leading to increase in calls and SMS charges, and Nigerians have blamed President Muhammadu Buhari for the increase.

    TheNewsGuru.com (TNG) reports Buhari proposed the Finance Bill 2019 and, forwarded same to the National Assembly, which the Senate had since passed into law, raising the country’s VAT from 5 to 7.5 per cent.

    The law came into full effect from January 2019, with the federal government saying the increase will not affect the poor. However, telecoms operators in the country have since started applying the 7.5% VAT increase on SMS and phone calls, sparking outrage from all and sundry.

    https://twitter.com/__hajjah/status/1225476224664903683?s=19

    Recall that the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, at the opening of the 25th Nigerian Economic Summit (NES25) had assured Nigerians the VAT increase will not affect the poor.

    At the yearly gathering, the Minister said that raising of VAT to 7.5 percent from 5 percent would affect the wealthy in the society more than the poor in the country.

    “The proposed VAT increase is likely to impact more on consumption by the urban communities and the wealthier sections of the population, than on the poor,” Mrs Ahmed said at the event, which was declared open by President Buhari.

    The Minister said the 7.5 percent VAT increase proposal was in line with the recommendations of the Presidential Committee on the Funding Options for the Minimum Wage Increase.

    Read some reactions from Nigerians after the law came into full effect below:

    https://twitter.com/_starbiola/status/1225540398740901888?s=19

    https://twitter.com/woshtv/status/1224990394909429760?s=19

    https://twitter.com/precyfine/status/1225132999018209280?s=19

    https://twitter.com/woman__being/status/1225117511609409537?s=19

    Meanwhile, the Ministry of Communications and Digital Economy had addressed the development, moving far away from the increase, while also assuring that the Ministry under the leadership of Isa Pantami will protect the interest of all Nigerians.

    Uwa Suleiman, Spokesperson to the Minister of Communications and Digital Economy in a statement said the matter was not under the purview of the Ministry.

    Uwa said the Ministry had been inundated with complaints and enquiries concerning the 7.5% VAT deductions on voice calls and text messages by telecoms operators.

    “While we appreciate the support and efforts of well meaning Nigerians who have sought clarifications in a civil manner, we wish to inform the general public that the issues of VAT do not fall under the Ministry’s purview.

    “The office of the Honourable Minister of Communications and Digital Economy is not mandated to handle VAT.

    “In the same vein, we also wish to notify the general public that contrary to popular opinion in some quarters, the Honourable Minister of Communications and Digital Economy had no prior consultation or awareness about the development.

    “All further enquiries and clarifications may henceforth be directed to the Federal Inland Revenue Service (FIRS), being the proper institution for tax matters,” the statement read.

    However, Uwa in the statement assured all Nigerians that the Ministry under the leadership of Isa Pantami, will protect the interest of all Nigerians.