Reverse VAT To 5%, NECA Urges FG
The Nigeria Employers’ Consultative Association (NECA) has urged the Federal Government to reverse the current Value Added Tax (VAT) from 7.5 per cent to initial five percent.
NECA said this should be part of the measures to ameliorate the impact on businesses and save the economy from further collapse.
This, according to NECA, will also curtail the imminent job loss after Covid-19.
Speaking at Association Quarterly Economic Review at the NECA House in Ikeja, the President of the NECA, Mr Taiwo Adeniyi said: “We wish to state with concern that organized businesses were basically left in the lurch to weather the challenges alone.
“With many businesses closed down and many others on the verge of bankruptcy, we had urged government to give attention and support to businesses to ensure their survival and competitiveness.
“With unemployment rate soaring high pre-Covid-19 and reaching an alarming rate during the pandemic period, it was expected that necessary Job Retention Scheme as proposed by our Association would be given adequate consideration; this was never the case. As full economic activities are on the brink, we, once again, urge government to take a second look at long term strategic support for organized businesses to enable an accelerated and sustained economic recovery.
Adeniyi said the effects of the various restrictions on businesses prompted the Federal Government to introduce fiscal and monetary measures to ameliorate the impact on businesses and save the economy from further collapse.
He, however, commended the government on the N50 billion credit to house hold and Small and Medium Enterprises (SMEs)
“Worthy of commendation is the Central Bank of Nigeria (CBN) N50 billion credit facility to households, and Small and Medium Enterprises most affected by the pandemic, as well as N100 billion loan to the health sector, and N1 trillion to the manufacturing sector. In addition, the interest rates on all CBN interventions programmes were revised downwards from nine per cent to five per cent, and a one-year moratorium was introduced, effective March 1, 2020.
On the Oronsaye Report, NECA call for the quick implementation saying that the Report is fundamental to the institutionalisation of operational efficiency and reduction of government expenditure in the long term.
He said that it is worrisome that with over two hundred and fifty institutions, parastatals and agencies of government, the average cost of governance in Nigeria remains among the highest globally.
He said: “We commend the President for approving the implementation of the Oronsaye Report, albeit eight years after its submission to the last administration.
“Over the past years, we have reiterated that the implementation of the Report is fundamental to the institutionalisation of operational efficiency and reduction of Government expenditure in the long term.
“It is worrisome that with over two hundred and fifty Institutions, Parastatals and Agencies of Government, the average cost of governance in Nigeria remains among the highest globally. We urge that the Oronsaye Report should not suffer the fate of the Ahmed Joda Panel Report and the Allison Ayida Report of 1995”.