VAT Increment: Reps Pass Bill For 2nd Reading

The House of Representatives has passed for second reading the Finance Act (Amendment) Bill, a component of which seeks to increase the Value Added Tax from five per cent to 7.5 per cent.

The bill, which has seven components, seeks to amend the Companies Income Tax Act, Value Added Tax Act, Customs and Excise Tariff (Consolidation) Act, Personal Income Tax Act, Capital Gains Tax Act, Stamp Duties Act and Petroleum Profit Tax Act.

According to the short title of the legislation, the amendments seek to provide for the review of tax provisions and make them more responsive to tax reform.

In an exclusive report by Economic Confidential on Tuesday, several members of the House had criticised the plan by the Federal Government to raise the VAT.

According to the lawmakers, in separate interviews, higher VAT will create more hardships for the masses.

The lawmakers, who are members of the opposition Peoples Democratic Party, asked that the rich be taxed more through the luxury items they consume.

However, at the second hearing on Wednesday, only Nicholas Ossai, among the PDP lawmakers, raised strong issues against the VAT increment. “There are areas of this bill that pinch the masses and we represent the grassroots,” he said.

According to him, the areas include air travel, which is no more a luxury as the roads are bad and not secure, and electricity, which will affect the lower class adversely.

In his ruling, the Speaker referred the bill to the House Committee on Finance for further legislative action. The committee is expected to conduct a public hearing on the legislation.

The bill had narrowly passed second reading at the Senate, with several senators vowing to mobilise stakeholders against it during public hearing.