Former Lagos State Governor, Senator Bola Tinubu, Wednesday in Abuja warned the federal government against the planned move to increase Value Added Tax (VAT), saying doing so would reduce people’s purchasing power and further slow down the economy.
Tinubu gave this warning while making his closing remarks at the 11th Bola Tinubu Colloquium, in commemoration of his 67th birthday at the International Conference Centre (ICC), with the theme: ‘Next Level, Work for the People.’
According to the former Lagos State governor, the timing of the proposed VAT increase is wrong, advising the government that instead of increasing VAT in this moment of economic upheavals, the government should rather broaden the scope of tax collection with a view to making more people pay and thus put paid to any planned increase in VAT rate.
He said: “Consumer spending is slipping and this is where I will stop and appeal to Professor Yemi Osinbajo and his team to put a huge question mark on any increase of VAT please. If we reduce the purchasing power of the people, we can further slow down the economy. Let’s widen the tax net.
“Those who are not paying now, even if it is inclusive of Bola Tinubu, let the net get bigger and take more taxes and that is what we must do in the country instead of additional layer in taxes.”
Tinubu also said the world was at the verge of another economic recession, saying Europe was already grappling with unfavourable economic experience, adding that the forecasters had predicted another round of recession within the next 12-18 months.
He advocated the need to heed this global warning and swiftly rise up to confront it by cogitating and working harder to put the imminent economic crisis under check, pointing out that he was not raising alarm but rather doing the needful by making the information at his disposal available so that Nigeria could proactively evolve necessary policies.
Tinubu explained: “Even without Brexit, the EU itself has entered a rough patch. The Euro zone may already be in recession. Stock markets experience wild swings that speak to an underlying weakness and pessimism about the immediate future.
“Forecasters are predicting a global recession within the next 12-18 months. I render these observations not to frighten anyone but because they ring true. Wisdom requires that we accept reality instead of obscuring it under the cloak of wishful thinking.
“We must build policies that interact with the world as it is and not with the world as it should be. We must recognize these harsh economic tidings as advance warnings to the wise. Hence we must think deeper and work harder for our people in Nigeria.
“I would be a most wicked friend if I knew a storm was approaching yet convinced you to ready your family for an outdoor picnic under the tallest tree. The truth is always a more valuable guardian than fantasy.”
Tinubu also counselled the federal government to reposition the economy more effectively in a way that it can meet the yearnings and aspirations of Nigerians, saying in ideal situations, economies are positioned to meet the legitimate desires of the people.