Former Minister of State for Finance, Dr. Yerima Ngama, on Thursday cautioned against increasing the Value Added Tax (VAT) amid Nigeria’s current economic difficulties.
Speaking at a Public Hearing on Tax Reform Bills organized by the House of Representatives Committee on Finance at the National Assembly Complex in Abuja, Ngama, representing the Arewa Consultative Forum (ACF), rejected the proposed VAT hike, inheritance law, and the scrapping of agencies like TETFund, NASENI, and NITDA.
He argued that raising VAT would unfairly burden taxpayers, suggesting instead that the federal government broaden the tax base rather than increase rates. “Expanding the tax net is the solution, not raising VAT,” he said.
Ngama also questioned the government’s ability to collect taxes efficiently. “Rather than increasing tax rates, we should focus on improving collection capacity. What’s the point of raising taxes when less than 30% is collected?” he asked.
He recommended maintaining the current 7.5% VAT rate, emphasizing that raising it could negatively impact consumer spending and economic growth. “While we acknowledge the need for higher revenue, the existing VAT rate already imposes a heavy burden on businesses and citizens,” he noted.
On VAT distribution, he suggested that revenue sharing should be determined through political consensus among federal, state, and local governments rather than through legislation. “Not everything needs to be codified into law,” he said.
Ngama also proposed reducing the excessive powers granted to the Chief Executive Officer and Chairman of the Joint Revenue Board, arguing that concentrating authority in one individual could be problematic.
“The National Revenue Service chairman holds too much power—he appoints coordinating directors and also chairs the board. It’s an overwhelming workload,” he observed, recommending that the president appoint executive directors, subject to Senate approval.
Regarding the Nigeria Tax Bill, he advocated for amending Section 69 to retain TETFund and NITDA, highlighting their crucial roles in education and technological advancement.
On inheritance laws, he urged the National Assembly to remove the section entirely, allowing states and local governments to decide on the matter independently.
Ngama also praised President Bola Tinubu for establishing a livestock ministry and proposed that the minister be tasked with creating 40 world-class ranches nationwide by 2027.
Join Informant Online WhatsApp Channel With Link Below: https://whatsapp.com/channel/0029VaihFajBadmT29ufud2
