The Manufacturers Association of Nigeria on Thursday said the proposed VAT rate increment was unfriendly to the manufacturing sector.
According to him, the timing is inappropriate, especially at a time when the minimum wage of N30,000 was just agreed upon. Ajayi-Kadir urged the Federal Government not to increase VAT at this point in time, but to consider the implementation of the other tax-specific recommendations. In addition, Ajayi-Kadir said the economy would certainly experience demand crunch, inventory of unsold items would soar, profitability of manufacturing concerns would be negatively impacted, many factories would witness serious downturn or wound down operations.According to him, this is above 23 per cent, as Nigerians currently employed by manufacturing concerns and other businesses may join the reserved army of unemployed and further bloat the unemployment rate.
“The precarious macroeconomic condition of the country requires palliatives that will improve investment and not higher tax burden. Ajayi-Kadir decried the unfair comparison of VAT rate in Nigeria with other countries in Africa, stating that the macro-economic dynamics and the level of competitiveness in these countries were not the same with the country.
“The high PCI and National Minimum Wage countries like South Africa, China and the likes are able to adequately offset the impact of high VAT on growth and wellbeing of the populace,” he said.
What did they expect? We already have a proposed deficit budget prior to the approval of the minimum wage....where will it's funding come from ... TAXES!!!
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