States, Councils to Share 85% of VAT in 2020—Fashola

By Adedapo Adesanya

Eighty-five percent of the proposed Value Added Tax (VAT) of 7.5 percent in the 2020 national budget will be expended on states and local governments to handle infrastructure as well as salaries of workers.

Minister of Works and Housing, Mr Babatunde Raji Fashola, who disclosed this in a statement on Thursday, stated in a bill described as “pro-people and pro-state” that the document (bill) would drive for development in the states and also enhance the well-being of citizens.

He also said that the remaining 15 percent of the bill will go to the Federal Government also for the development of infrastructure in the country.

“We focus more on developmental infrastructure. A completed road is a development drive; a completed airport is also a development drive. These are the critical contents embedded in the budget, not just the numbers,” the Minister said.

Mr Fashola used the opportunity to point out to critics of the bill to look more at the content of the bill rather than the figures.

“Everybody is just looking at the numbers, but how many people are doing the analysis aside from the numbers?” he asked.

The Minister then said people should look at the clear statement of intent of the bill, which was looking at how it would grow the economy, raise money and not hurt people through unfavourable tax regimes in the process.

The federal government is looking to increase the VAT rate to 7.5 percent next year from the present 5 percent so as to raise revenue for the country to meet the next year’s budget estimates submitted to the parliament this tuesday.

The present VAT rate of Nigeria has been described by government officials as the lowest in Africa. The government hopes to increase revenue and further expand the tax net to capture more people paying the statutory fee to the government.

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

more recommended stories

%d bloggers like this: