“VAT is a consumption tax, only payable by choice ~ Babatunde Fowler, FIRS”

by Adabanija Kamorudeen

Read about VAT here.

VAT is a consumption tax, only payable by choice
~ Babatunde Fowler, FIRS

“What that means is, if A wants to impress B, and takes B to eat at the Transcorp Hilton, A will pay VAT for services enjoyed. This is because of the environment.

“The cost of the Coca Cola they will drink at Transcorp Hilton at N1,000 could have been bought at N100 in any supermarket without paying any VAT.

“Also, A can buy chicken, with all the ingredients in the market, cook it and eat without any VAT. But, instead of spending N5,000 for that meal, if A decides to go to the Transcorp Hilton and spend N20,000, then A must pay VAT. It is a choice A has to make.

The only exemption for VAT are items required by everybody, regardless of choice. There is no VAT on those. Items like education, medical etc. These are things that, regardless of choice, one is expected to have. But, if one decides to buy a brand new car, one will be expected to pay VAT.

The next question is what VAT is used for? About 85 per cent of VAT goes to state governments that cannot pay salaries or provide good roads or primary healthcare, despite being their constitutional responsibilities to do.

If they do not have the funding, either through the pay-as-you-earn (PAYE), personal income tax, or VAT, then they can’t do it. VAT is a personal choice.

The same Nigerians go to Ghana, South Africa, England and pay VAT three times the amount they pay in Nigeria. Or they go to Dubai and pay the same amount collected in Nigeria.

The question is: Why are people making so much fuss about VAT when in reality VAT is subject to choice for those who can afford it?”

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