VAT Increase Underway As FG Outlines New Economic Blueprint | Independent Newspapers Limited
Newsletter subscribe

News

VAT Increase Underway As FG Outlines New Economic Blueprint

Posted: Mar 23, 2016 at 12:43 am   /   by   /   comments (0)

Innocent Oweh, Abuja

 

The Federal Government and governors of the 36 states of the federation rose from their National Executive Council meeting in Abuja on Tuesday with a resolve to adopt a gradual increase in Value Added Tax (VAT) as a means of rejuvenating the economy.

The meeting was, however, not specific on the actual scale of increase in VAT.

The all encompassing economic forum equally resolved to boost public infrastructure but with assistance from public private partnership (PPP) initiative as was with the administration of ex-President Goodluck Jonathan.

In a communiqué issued after the meeting and made available to newsmen by

Special Adviser to the Vice President on Media, Laolu Akande, said the forum agreed that they should expand compliance on VAT, while adopting a gradual plan for rate increase.

“The economic forum deliberated on increase in expenditure through borrowing, which should be invested in infrastructure. Federal and state governments are to focus on fiscal responsibility as a critical element in macro-economic balance.

“They are also to increase investment in infrastructure through public private partnership (PPP) while developing financial inclusion strategies to cater for the poor and vulnerable population as well as maintain a minimum level of capital expenditure of 30% in the budget”.

On agriculture, they agreed that the Federal Government should reposition the Bank of Agriculture (BoA) to enhance its capacity to finance agriculture, including setting aside funds for agricultural sector which is considered critical while more of the intervention funding would come from the Central Bank of Nigeria (CBN).

“A single digit interest rate for agricultural loans was considered while duties and taxes for agricultural products and equipment should be waived.

“Also there was a consensus to develop strategic partnerships between Federal and State governments, whereby each state should make specific commitments to crops in which it has comparative advantage and request Federal Government’s intervention.

“National targets for self-sufficiency would be set for identified crops, which should be monitored. Tomato, 2016; rice, 2018, wheat, 2019.

“The Federal and State governments should roll out agricultural extension services nationwide including establishing the commodity exchanges for price regulation and avoidance of losses due to lack of markets.

“They also agreed that the Abuja Commodity Exchange be revitalised while the National Agricultural Land Development Authority (NALDA) be re-established”.

Other measures taken by the NEC was that the Federal Government should develop an agriculture implementation plan whereby state governments are encouraged to identify at least two crops in which they have comparative advantage.

“It would become mandatory for states to open up of rural/feeder roads to facilitate transportation of agricultural produce to be supported by the Federal Government as well as government at the centre establishing minimum price guarantee for farm produce.

“The Federal Government would provide immediate funding to upscale efforts of Agricultural Institutes of Research and Development across Nigeria.

“State governments would also be encouraged to fund research and development in agriculture through technical colleges, universities and research institutions”.

On solid minerals, NEC agreed that the Ministry of Solid Minerals Development complete and present the solid minerals development roadmap which is expected to address issues of illegal miners, licenses, taxes and royalties by March 31, 2016.

The regulatory ministry would engage with state governments on the roadmap and agree on any amendment that may be required by June 30, 2016.

They are to initiate relevant legislative changes that maybe necessitated by the agreed roadmap by July 31, 2016 and conclude the revalidation/recertification of all mining leases by September 30, 2016.

According to the communiqué, there was supposed to be a robust agreement with states and local governments on respective responsibilities for developing feeder roads and other critical infrastructure for solid minerals development.

The communiqué read in part, “Federal Government and states are to set deadlines to achieve self-sufficiency in bitumen/asphalt and tiles to discourage/stop importation.

“Make and communicate final decisions on operationalization of Ajaokuta steel plant by 30th June 2016 and establishment of joint committee to address issues of data on quantity and quality of minerals exploited and exported.

“Setting up of mining cadastral zonal offices for proximity to states for the purpose of issuing licenses and easy monitoring by states.

“Discourage use of wood for cooking by promoting use of coal briquettes. Guarantee access to finance solid minerals development via intervention funds and private sector capital as well as block revenue leakages in the sector through effective monitoring of activities in the mining sector.

“Organise artisanal/small-scale miners as a mechanism for reducing illegal mining and establish mines surveillance taskforce by September 2016.”