Tinubu’s Reform: How States Can Generate Fat VAT?
By Nasir Abdulquadri
*NOTE: FAT-VAT means huge remittance from VAT* My coined compound word though.
Value-Added Tax (VAT) is a consumption tax levied on the value added to goods and services at each stage of production and distribution. As an indirect tax, it’s paid by consumers but collected and remitted by businesses.
In the context of the new tax reform, VAT presents an opportunity for state governments to stimulate economic growth and increase revenue. By leveraging VAT, states can incentivize consumption, investment, and entrepreneurship, ultimately leading to increased economic activity and tax revenue.
For instance, MTN’s 55 million subscribers provide a significant source of VAT revenue. However, under the old tax regime, this revenue was largely concentrated in Lagos making Lagos getting *FAT-VAT*, where MTN’s headquarters is located. The new tax reform addresses this imbalance by allowing states to retain a relative larger share of VAT revenue generated within their borders and get *FAT-VAT*
This shift in VAT policy would have significant implications for state governments. To maximize VAT revenue, governors must focus on creating an enabling environment that fosters economic growth, entrepreneurship, human capital development and investment.
For states to have access to *FAT-VAT* they should quickly do the followings without delay..
– Improving infrastructure and empower business of grassroots through deliberate creativity and innovation.
– Deliberately Investing in human capital development and peculiar kind of education that pushes for disruptive innovation. Away from consumption to production.
– Encouraging entrepreneurship and innovation through business-friendly policies
– Enhancing transparency and accountability in tax administration
By adopting these strategies, state governments can increase VAT revenue, stimulate economic growth, and improve the overall well-being of their citizens. FAT-VAT is achievable when we empower our people. We should stop giving them handout to just settle for AMALA and EWEDU.
In conclusion, the new tax reform presents a unique opportunity for state governments to *rethink* their approach to VAT and unlock its potential for economic growth and development. It is an opportunity to help our people grow without indulging their weakeness and complacency. Let us start building our youths for the future, not just building the future for them. If the future is built and people that own the future are not built, little hunger that would cause fierce anger, the entire *built-future* would be set ablaze. Evidences abound.
That is my view on the controversial VAT-related matter in the new tax reform document. Just VAT part for now.
BUILD YOUR PEOPLE AND YOU WILL GET FAT-VAT FROM THEIR INGENUITY
Nasir Abdulquadri, a Development Economist is CEO D-Positive Global Image Services Consult Limited/Nastv Africa. [email protected]
