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EDITORIAL

Proposed VAT Increase to 7.5%

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The Federal Government recently announced a proposed increase in Value Added Tax (VAT) from 5% to 7.5%. Minister of Finance, Budget and National Planning, Zainab Ahmed, who announced the decision at the end of the Federal Executive Council (FEC) meeting said the sub-national governments in particular would need to fund the new minimum wage with the extra income from VAT. She emphasised that the increment was important because the federal government only retains 15 per cent of the VAT while 85 per cent is actually for the states and local governments, adding that the states need additional revenue to be able to meet the obligations of the minimum wage.

Beyond this, the government rationalised the proposed increase on the basis that it needs to raise revenue and also be at par with continental standards as Nigeria currently charges the lowest VAT in the whole of Africa. According to the minister, VAT revenue will increase to N2.
09 trillion in 2020 when the new regime comes into force. “The Federal Government will be receiving proposed aggregate of N4.26 trillion from the Federation Account and the VAT pool. The states and local governments are expected to receive N3.04 trillion and N2.27 trillion respectively,” the minister stated.While we agree with the government that it needs money to run its business and tax is one way it can generate such funds, like governments all over the world, increasing VAT is definitely not the way to go.What Nigeria needs at this time, as we have stated before on this page is holistic tax reforms, not a VAT increase that puts pressure on Nigerians who are already battling the effects of low income.As it stands, the implementation of the new N30,000 minimum wage, which many of the states that were unable to pay the N18,000 minimum wage have expressed unwillingness and or inability to pay, is yet to begin. Understandably, this money will come in handy for the government as it grapples with the increase in personnel cost occasioned by the minimum wage increase.Be that as it may, in all of these, the government has failed to take into consideration the impact of tax increase on consumer behaviour as shown by a world bank report which showed that more than any other form of indirect tax, VAT potentially distorts behaviour patterns of consumers and may not be very efficient in generating income. While the government is quick to draw comparison from other countries where Vat is higher, it has failed to observe that in those countries, there are existing social services which are also efficient. An increase in VAT at this time will increase inflation which was 11.37 per cent in 2019 Q1 and erode whatever benefits to be accrued from the minimum wage increase, as VAT affects consumer goods, including food. Rather than a blanket tax increase that affects all of the 94 million poor people in the country, the government may consider increasing tax on luxury goods as proposed by former finance minister, Kemi Adeosun. It is instructive that the increase in VAT would not take effect until the Act is amended by the National Assembly. While we await National Assembly’s action on the matter, we propose that the federal government widens the tax net to ensure that more people pay tax.

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A situation where only 14 million of the 69 million taxable Nigerians pay their taxes is unacceptable returns annually. Tax evasion, which Nigeria’s wealthy people are guilty of is a serious crime and offenders must be punished in accordance with extant laws. Also, the government needs to work on reducing the cost of governance as we have often observed that there is a lot of wastage and duplication in government. 


EDITORIAL

In Support Of The Ban On Open Grazing 

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After years of indecision, procrastination and dilly dallying, the Federal Government last week took a firm decision to ban open grazing of cattle across the country. The implementation of the ban will however take-off on a pilot basis in five states of the Federation-Benue, Taraba, Plateau, Nasarawa and Zamfara.

The decision was taken by the National Economic Council (NEC) after its meeting in Abuja on Wednesday.

Minister of Agriculture and Rural Development, Chief Audu Ogbeh, who made the decision public on behalf NEC also said the Council equally banned the free movement of cattle and other animals across the Nigerian border from other West African countries, regardless of the relevant protocol of the Economic Community of West African States (ECOWAS) which guarantees free movement of people and goods within the sub-region.

We welcome the decision of NEC even though it is coming late in the day when the country has witnessed unnecessary spilling of blood from incessant clashes between Herdsmen and farmers nationwide.

The clashes which have become a national security concern, it is hoped will abate since the Herdsmen will by the new decision adopt to ranching which is the global best practice in animal husbandry.

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We are even the more happier that the decision was not based on political or  religious sentiments but a product of the report of the  technical committee earlier set up by Council under the chairmanship of Ebonyi State Governor, David Umahi.

Umahi’s Committee traversed the states where the farmers-Herders clashes have been most prevalent, i.e Benue, Taraba, Nasarawa, Plateau and Zamfara states. During the fact-finding visits, the Committee met with all stakeholders including farmers, security agencies, state governors, leaders of Miyetti Allah Cattle Breeders Association of Nigeria (MACBAN) and Miyetti Allah Kautal Horel, among others.

In all the meetings, ranching was canvassed as the most enduring solution to the bloodletting occasioned by the farmers-Herders clashes. The Committee was therefore, left with no better option than recommend the ban on open grazing of cows.

The NEC decision has at long last vindicated the Benue State Governor, Samuel Ortom and his Taraba state counterpart, Darius Dickson Ishaku, both of who enacted the anti-open grazing law as a panacea to the frequent violent clashes between farmers and the Herdsmen. It can be said therefore, that the two governors understood the issues and the best solution and indeed acted appropriately. It is to their credit that  NEC arrived at the same solution the two governors proffered several months earlier.

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While we commend NEC for the courage to take this decision, the security agencies especially the police and the Department of State Services(DSS) must immediately commence the enforcement of this ban otherwise the Federal Government decision would pass as one of the  rhetorical statements commonly associated with politicians when confronted with difficult situations. 

As has been severally argued by experts, Nigeria with a little over 26million cattle should have no problem operating ranches since countries like India, Brazil, Argentina and the US with upward 100million cattle have long practiced ranching.

What more, animal scientists have since established that the nomadic cows produced less milk and poor quality meat compared to those kept in ranches.

The Federal Government should live up to its words to provide subsidies for animal husbandry as recommended by the Umahi Committee.

In our view, the subsidies should come by way of

If the NEC decision is properly implemented, Nigeria would have just began the journey towards a profitable and healthier cattle rearing business through the ranching model.

Most importantly, the NEC decision banning the free movement of

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EDITORIAL

The Owo Killings

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Nigerians appear  to be tired  and even  helpless  as a result of the nation’s drift into a  state of high level of insecurity.

The country that prides itself  as Africa’s most populous nation, and equally  boasting of its largest economy  has degenerated  over the years  to   become the killing field for terrorists, bandits, kidnappers , and other criminal elements in the society.

The killings of hundreds of the nation’s defenceless citizens, and even scores of security men have continued unabated because the government, especially the Federal Government has shown itself to be   weak and indecisive towards  handling the criminal elements.

Barely a week after the massacre  of farmers and other  defenceless   Nigerians in Borno and some states in the North, a group of criminals carried out another heinous  attack on a church in Owo , Ondo State on Sunday, June 5.

The attack, which was unleashed on   Saint Francis Catholic Church, Owa-luwa Street, Owo,  the headquarters of the Owo Local Government Area of Ondo State witnessed pandemonium  as gunmen struck leaving no fewer than 50 persons dead.

There has  been serious concern among Nigerians as the  attack on the church in Owo,  the hometown of the state Governor, Rotimi Akeredolu, came barely a week after the Prelate of the Methodist Church of Nigeria, Bishop Samuel Kanu-Uche, was kidnapped in Abia State by gunmen which  the priest later identified as Fulani youths working with some security men.

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Reports had it that  the gunmen, who attacked the Catholic church, arrived at the premises, which is less than 200 metres from the palace of the Olowo of Owo, at 12pm when the Sunday mass was being rounded off.Reports further had it that  worshippers, mostly children and women, were killed in the attack, by the criminals  who were said to have thrown an improvised explosive device before they started shooting sporadically.Some videos posted online showed some of the slain worshippers in a pool of their own blood.

Workers of the Federal Medical Centre and Saint Louis Hospital, both in Owo, where the dead and the injured were taken to, said no fewer than 50 persons were killed in the tragedy.

While visiting the scene of the tragedy,  Governor Rotimi Akeredolu of Ondo state and the Olowo of Owo, Oba Ajibade Ogunoye have appealed to youths in Owo, Ondo state not to retaliate the killing of worshippers at St Francis Catholic Church in the town.

Speaking during his visit to the church and hospitals where survivors of the attack are receiving medical attention, Gov. Akeredolu,further  described the terror attack on innocent worshipers at St Francis Catholic Church, Owa-luwa Street, Owo, as a massacre and horrific.

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Akeredolu, who said he was terribly sad, noted that the attack was the most dastardly act that could happen in any society.He said the  security agencies lost no fewer than  two men and that the incident  was not an expected attack.

The Governor  expressed  his  condolences to those who  lost their dear ones to this unnecessary gruesome murder.

He declared that the ugly incident  must not happen again as the people must  very vigilant.

At the palace of the Olowo of Owo, Oba Gbadegesin Ogunoye,  Gov. Akeredolu  condoled with the monarch over the sad incident.Akeredolu said the gunmen made a mistake of attacking Owo, vowing that they will not escape justice.Like other men of goodwill we condemn in totality the killings in Owo, which we describe as callous, wicked and inhuman.

We are condoling with the government and people of Ondo state, the relatives of worshippers that lost their dear ones as a result of the ugly incident.

Once more, we call for a review of the nation’s security architecture, which has failed the nation in tackling the numerous security challenges. Without further ado, the much advocated state police is an idea whose time has come. Nigeria must embrace state police for its survival and existence as a nation.

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EDITORIAL

NPA as Den of Corruption

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The Nigeria Ports Authority, (NPA)is one of the agencies of the Federal Government notorious for corruption.  A body like NPA that should serve as a  cash cow for the government of the Federation  has unfortunately  been turned into an organ  for looting and stealing in high places.

Exactly a year ago, its former Group Managing Director, Hadiza Bala Usman was suspended from office, with an Administrative panel set up to investigate a number of allegations against her, mainly on illegal diversion of funds close to N 200 billion.

 While Nigerians continue to wait in despair for the official  outcome of the probe, another disturbing report of high level of corruption against the management of NPA came to limelight recently. 

Chairman, House of Representatives Committee on Public Accounts, Hon. Wole Oke has demanded explanation from the management of   NPA, over non-remittance of millions of dollars by terminal operators and the agency into the Federation account.

This followed the launch of a large scale investigation by the House committee into the matter. The probe came on the heels of 12 audit queries from the office of the Auditor General for the Federation on the financial statement of the NPA for the 2019 financial year. Of the number, NPA has only responded to one on the indebtedness of terminal operators to the government.

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The House of Representatives  has therefore began probe of the  unremitted multi-million dollars by terminal operator,  to the commonwealth.

The amount involved is about $852.094 million and N1.897 billion.

NPA however said the sum of N269.410 million of the N1.8 billion has been recovered while the balance of N1.6 billion “invoices processed on the encumbered areas remain unpaid”.

NPA said in its lame defence that bills raised on encumbered areas which remained unpaid is $19,169,459. This is a serious development ,  that should not be allowed to be swept under carpet as appears to be the case with the former GMD of the NPA.

Hadiza Bala  Usman who  did not conduct her self with the integrity  while at the agency. President Muhammadu Buhari approved her suspension, as a result of grave allegations against her.

She had to be probed as a result  at the instance of the supervising transport ministry, headed by Rotimi Amaechi.

Curiously before her sack, Usman was reappointed to continue heading the NPA in Janaury 2021 by President  Buhari several months before the end of her first tenure.

But the public is disturbed that there have been attempts to exonerate her of these allegations.  The former managing director of the NPA, has reportedly  been cleared of allegations of failing to remit N165 billion operating surplus to the coffers of the federal government.

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However, the 11-member committee set up by the ministry of transportation to probe the alleged fraud decided to shift its attention to allegations of insubordination to Rotimi Amaechi, the minister.

She was instead accused of ignoring ministerial directives and communicating directly with President Muhammadu Buhari.

Usman was originally suspended in May 2021 by the minister over an allegedly missing N165 billion but the committee did “not find any evidence” in its account reconciliation. We are calling on the Administrative Panel to make its report public for  the scrutiny of Nigerians. We are equally calling on the House of Representatives  to probe the Audit Report  indicting the NPA of unremitted colossal amounts in local currency and in foreign ones. It is no doubt a case of a case of high level of  corruption too many in NPA.

Corruption, sadly, continue to thrive in government agencies because of the present government’s lackadaisical attitude towards this monster. Matters must not and ca should not continue so for the advancement and well-being of the nation.

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