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Nigerians lament call rates as 7.5% VAT increase bites hard

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As the new Value Added Tax (VAT) regime takes full effect, 7.5 VAT is now being applied to phone calls and Short Message Services (SMS), leading to increase in calls and SMS charges, and Nigerians have blamed President Muhammadu Buhari for the increase.

TheNewsGuru.com (TNG) reports Buhari proposed the Finance Bill 2019 and, forwarded same to the National Assembly, which the Senate had since passed into law, raising the country’s VAT from 5 to 7.5 per cent.

The law came into full effect from January 2019, with the federal government saying the increase will not affect the poor. However, telecoms operators in the country have since started applying the 7.5% VAT increase on SMS and phone calls, sparking outrage from all and sundry.

Keep Naira clean

Recall that the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, at the opening of the 25th Nigerian Economic Summit (NES25) had assured Nigerians the VAT increase will not affect the poor.

At the yearly gathering, the Minister said that raising of VAT to 7.5 percent from 5 percent would affect the wealthy in the society more than the poor in the country.

“The proposed VAT increase is likely to impact more on consumption by the urban communities and the wealthier sections of the population, than on the poor,” Mrs Ahmed said at the event, which was declared open by President Buhari.

The Minister said the 7.5 percent VAT increase proposal was in line with the recommendations of the Presidential Committee on the Funding Options for the Minimum Wage Increase.

Read some reactions from Nigerians after the law came into full effect below:

Meanwhile, the Ministry of Communications and Digital Economy had addressed the development, moving far away from the increase, while also assuring that the Ministry under the leadership of Isa Pantami will protect the interest of all Nigerians.

Uwa Suleiman, Spokesperson to the Minister of Communications and Digital Economy in a statement said the matter was not under the purview of the Ministry.

Uwa said the Ministry had been inundated with complaints and enquiries concerning the 7.5% VAT deductions on voice calls and text messages by telecoms operators.

“While we appreciate the support and efforts of well meaning Nigerians who have sought clarifications in a civil manner, we wish to inform the general public that the issues of VAT do not fall under the Ministry’s purview.

“The office of the Honourable Minister of Communications and Digital Economy is not mandated to handle VAT.

“In the same vein, we also wish to notify the general public that contrary to popular opinion in some quarters, the Honourable Minister of Communications and Digital Economy had no prior consultation or awareness about the development.

“All further enquiries and clarifications may henceforth be directed to the Federal Inland Revenue Service (FIRS), being the proper institution for tax matters,” the statement read.

However, Uwa in the statement assured all Nigerians that the Ministry under the leadership of Isa Pantami, will protect the interest of all Nigerians.

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