NLC, others back govt on VAT
By Chinelo Obogo, Uche Usim, Adewale Sanyaolu and Magnus Eze, Abuja
Prominent Nigerians including renowned economists, elder statesman and industrialist yesterday slammed the Federal Government for raising a task force on food prices.
However, others backed the government over the proposed hike on Value Added Tax (VAT) on luxury items.
It was the decision of the Federal Executive Council (FEC) meeting chaired by Acting President Yemi Osinbajo in Abuja on Wednesday.
Firing the first salvo against the task force yesteray, the Founder, Center for Values and Leadership, Prof Pat Utomi, said the decision to set up a committee to tackle food prices was a foolish one.
‘‘The subject matter does not interest me at all. Though, I don’t have the terms of reference, but if it is about price control, it is the most foolish thing to do at this moment,’’ he said.
On his part, the Chief Executive Officer (CEO), Financial Derivatives Limited, Mr. Bismarck Rewane, said food prices are determined by market forces and not committees, adding that, if committees could bring down prices, the country won’t have inflation in the first place.
‘‘Those things are totally irrelevant at this time. The committee will achieve nothing because it is a total waste of time. The important thing is about policies. It is policies that will bring down prices of food. Committees will take sitting allowance and achieve nothing,’’ he cautioned
Reacting to the development, elder statesman, Tanko Yakassai said it is a fire brigade approach which may work in the short-term.
He advised that rather than carry out an action that may not have positive long lasting effects, the government should roll out a well-articulated programme that would address the issue.
He said: “I pray it would help, but I see it as a fire brigade approach. It can only work for a short time after which we shall go back to square one.
Another contributor, the spokesperson for Yoruba social-cultural group, Afenifere, Yinka Odumakin, said rather than constitute a task force, what the government must do is to get its fiscal policies right and everything would fall into place.
He said: “Are they going to send soldiers into the streets to force people to sell goods lower than the price which they bought them? I do not understand what the job of the task force would be. What is the task force going to do? Are they going to flog people to fall in line like they did in 1894? If Nigerians are looking for the definition of cluelessness, they have found it in this administration.”
Also reacting, National President, All Farmers Association of Nigeria (AFAN), Ibrahim Kabiru, said food price control mechanism has no place in Nigeria or in any society. He noted that government cannot tell anybody what and how much they sell what they produce.
“But the decision to set up a panel to ensure food security is very good and it is a very welcome development.
“If it is the task force that will ensure food security, which is to maximise production of food so that it will become affordable to people and probably with that, the prices will be affected because you do not need to spend foreign exchange to import food, which is very good, and it is timely.”
Meanwhile, Managing Director of Universal Quest/Coordinator, Community of Agricultural Stakeholders of Nigeria (CASON), Sotonye Anga, commended the Federal Government for taking the decision, saying there could be no better time than now because what Nigerians want to see right now is that they want to see food on their table at affordable price.
Commenting on the proposed VAT hike to 10 per cent on luxury goods, the President, National Association of Small Scale Industrialists (NASSI), Ezekiel Essien, said it was necessary for the government to jerk up the taxes paid on ostentatious articles as they only benefit the very rich, who are less than 20 percent of the nation’s population.
On the task force, the NASSI President said government should closely monitor members of the committee to drive the directive, as such policies are vulnerable to abuse.
For the President, Manufacturers Association of Nigeria (MAN), Frank Jacobs, the move to crash food prices was welcome as findings show food meant for certain places don’t get there. The food materials end up diverted or something and as such, such goods become very expensive in certain places. So, if the government plans to address that, it is a welcome development”, he said.
Supporting increased VAT for luxury goods, the president of the Nigeria Labour Congress (NLC), Mr Ayuba Wabba, explained that the principle of taxation world over is to make the rich subsidise for the poor. He lamented that before now, the reverse had been the case in Nigeria.
“Beyond that, government should make sure that people pay their appropriate taxes on the wealth they accumulate; including multi-nationals, businesses, politicians and influential Nigerians. Presently, it is only the workers that pay their appropriate tax like Pay As You Earn (PAYE)”, he said.
With regards to the task force on food prices, Wabba said while NLC waits for details from government, it was important to ensure everything is done to encourage the farmer.
Also commenting on the matter, an Abuja-based Development Economist, Tochukwu Okorie picked holes in government’s plan to force down food prices using committees.
According to him, prices of goods are determined by market forces only, adding that any attempt to use executive fiat would lead to hoarding.
“That is an attempt to go back to 1984 where government used the military to break into people’s shops and warehouses to sell goods at giveaway prices. We saw the implication. There was massive hoarding. That will likely repeat itself. When goods are available, prices will come down. That’s competition,” he said.
A development economist, Mr Odilim Enwegbara, queried: “How did someone in his right frame of mind conceive this in the first place? How did this government after rigorous debate (if there was any), decide that this can work?
“As far as I am concerned, it’s just an effort in futility. Or how does the government want to pursue its enforcement?
“I think that what government ought to do is to ensure that farmers are provided with all the incentives,” he said. (The Sun)