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Nigerians React! Government proposes 5% VAT on online purchases

Nigerians React! Government proposes 5% VAT on online purchases

Doris Ukaonu
Chairman of the Federal Inland Revenue Services (FIRS), Mr. Babatunde Fowler

The intention by the Federal Government to implement five percent Value Added Tax (VAT) on goods bought online has stirred mixed reactions from Nigerians.

Earlier today, August 16, News Agency of Nigeria (NAN) reported that the opinions from experts concerning the situation was that it will discourage the rising digital economy and also the revenue derived will not be utilized adequately.

According to the Chairman of the Federal Inland Revenue Services (FIRS), Mr. Babatunde Fowler,  the five percent VAT for online purchases was one of the steps of the government to raise revenue to fund the budget.

However, Prof Sheriffdeen Tella, a Senior Economist at Olabisi Onabanjo University, Ago-Iwoye, Ogun, urged that the online space was still growing and taxing it now would discourage transactions.

Tella pressured that the government should explore other ways of funding the budget.

Responding to the news, an Associate Professor from the Accountancy Department at the University of Benin, Dr. Chijioke Mgbame,  said that five percent VAT on online purchases was normal.

Mgbame, however, said that the greatest worry should be if the revenue generated will be utilized for development purposes.

“Nigerians are worried because they do not see the benefit for tax payment. Some commodities like food and children’s clothing should be exempted from tax,’’ Mgbame said.

He, however, noted that the structure of VAT was important, considering the welfare of citizens.

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Also, Dr. Phillip Ujomu, Associate Professor, Department of Philosophy, Federal University, Wukari, said that the tax to be deducted for online purchases seemed to be a move toward inclusion and accountable e- activity.

According to Ujomu, an area of concern could be the issue of multiple taxations at the latest local, State and Federal levels.

“More so, there seems to be the issue of citizens not easily seeing the positive impact of previous taxes. The truth is that Nigeria is struggling with its economy and is borrowing a lot to do basic things. So, taxing people more is an easy avenue to earn more money from peoples’ labor.’’ Ujomu said.

Sourced from NAN

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