‘Economy not in good shape to increase VAT rate’

Managing Partner/CEO, Okwudili Ijezie &Co, Blakey Okwudili Ijezie

Blakey Okwudili Ijezie is the Managing Partner/CEO, Okwudili Ijezie &Co. In this interview with Kehinde Olatunji, he urged the Federal Government to drop the idea of increasing the VAT rate until the economy of the country is in good shape. He lamented that many businesses are merely struggling to remain afloat and the increase if effected, could lead to their sudden deaths. He also spoke on the ongoing seminar to train individuals and government agencies on Internal Generated Revenue (IGR), tagged: “Strategies for improving IGR for States in Nigeria.”

The government has always collected taxes. Is there anything it has not been doing well that you think this seminar will correct?
May I first thank The Guardian crew for its initiative and resilience on matters that concern the nation. I’m grateful for your persistence in seeking relevant information that will better the lots of the country.

Now, to your question, the current happenings in the political and economic environments of the nation demand that all hands must be on deck to take the country to the next level. The major objective of the seminar is to expose participants to alternative strategies and initiatives that will improve transparency, efficiency, and effectiveness of IGR Systems.

Participants would equally be equipped with the basic skills for evaluation and appraisal of the existing Revenue Collection Framework and what is happening in other jurisdictions. Also, a fresh awareness will be created for participants on legal and institutional frameworks that are essential in effective revenue collection.

The government encourages people to be self-employed yet does not create a conducive atmosphere for them to thrive. Over time, these businesses have been taxed so high that they are being threatened. How can this be addressed?
I do not entirely agree with your assertion that the government does not create a conducive atmosphere for self-employed businesses to thrive. The seminar will focus on the current tax policies and there will be suggestions on topical issues. For instance, it will address issues of whether to increase the Value Added Tax rate, which currently is 5 per cent. All aspects of the tax laws will be touched at the seminar, with a view of equipping participants with the current legal and institutional framework for revenue collection.

Do we have laws that govern taxation in Nigeria and how can we ensure that the government works within them?
Yes, we have Laws that govern taxation in Nigeria. These include: Personal Income Tax Act, Cap P8, LFN 2004 (as amended), Value Added Tax Act, Cap VI, LFN 2004 (as amended), Petroleum Profits Tax Act, Cap P13, LFN 2004 (as amended), Companies Income Tax Act, Cap C21, LFN 2004 (as amended), Tertiary Education Trust Fund (Establishment, Etc) Act 2011, Stamp Duties Act, Cap S8, LFN 2004 (as amended) among others.

In order to ensure that government works within the ambit of tax laws, I will advise individuals and corporate organisations to engage the services of tax consultants, with a view to utilizing all the tax incentives embedded in the various tax laws in order to reduce their tax liabilities to the legally acceptable minimum. These tax consultants, who are versed in the tax laws, would ensure that taxpayer’s rights are applied. 

These rights include: Object to a tax assessment that is not in agreement with business activities as provided by the tax laws, Appeal against a notice of refusal to amend an assessment as specified by the relevant laws Be issued a tax clearance Certificate (TCC) upon settlement of tax liabilities or be given a notice of denial within two weeks of application, TCC itself is free, and be granted refund on excess tax paid after proper auditing with the option of using it to offset future tax liability.

Do you think the government is overtaxing people? If not why the outcry about heavy taxes?
To be honest, I do not think that the government is overtaxing people. In the same vein, I am not aware of any outcry about heavy taxes. The tax rates, to the best of my knowledge, have not been increased for over two decades.  However, I am aware of the outcry by several people and organisations against the proposed increase of Value Added Tax (VAT) rate, from the present rate of 5 per cent to 7.5 per cent. 

My opinion is that the time is not ripe to effect this increase. I appeal to the Federal Government to drop this idea of increasing the VAT rate until the economy is in finer shape. Many businesses are merely struggling to remain afloat. The increase, if effected, could lead to their sudden deaths.

What I will advocate is for the government to strategise and bring more people into the tax net. This is part of the raison d’être of our IGR SEMINAR. May I appeal to the various state governments and the federal government, and even the local governments to utilise this seminar to up their internally generated revenues.

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