Much ado about VATs and charges by Yinka Olaito

Every great and rational leader means well for the governed. Many want to be remembered for good by leaving behind great legacy. The challenge in this is the process, attitude and communications. President Buhari’s team seems to have good plan and mean well if one looks behind the veils. Unfortunately what I have seen over the years is government keeps overlooking the basic, presenting an attitude it is in ‘militocracy’ instead of democracy.



Dialogue, consultation, effective communications and feedback management system are essential to get people’s buy-in in democracy than just passing out information and expect hundred percent compliance without any vibes. I am beginning to allude to what Reuben Abati once said there is a spirit of error operating in Aso Rock. Dr.Abati said in many situations, government policies are planned with great benefits for the led but in reality there is usually a misunderstanding between the genuine intent of the government and how people see it.


I am not holding brief for the government. My research about the two issues- VATs and bank charges, introduced by government have great sustainable value than its disadvantage. Unfortunately, National Orientation Agency or whichever other relevant Agencies, which should do its work on public education and enlightenment are in moribund. Meanwhile countless numbers of people are hired and are collecting salaries for doing absolutely nothing leaving the government to suffer the backlash.


Let us examine the value Added Tax of about 7% to be paid on luxury goods. Yes, Manufacturer Associations of Nigeria has come out to say it has possibility of increasing inflation and cost of production. But truth be told if one has the fund to throw around to buy such luxury, which are not require for life survival, one should be ready to pay for such luxury. I also think the problem emanates from average Nigerian’s disposition to anything called tax.


Tax was never important part of our lives since we had oil boom which covered many of our expenses. Government bore all the burden. There was enough money to go round. Tax collectors in those days were seen as wicked who must be avoided like plague. Nigerians carried this mentality for so long even when the oil revenue was draining. Tax as a word sounds like a plague to average Nigerian’s ears. Couple with this was mismanagement and fraud within the government circle. These two factors made people lose any conviction of being a good citizen who sees tax payment as parts of civic responsibility.


Anything that has to do with tax or tax increase is always attended with unnecessary uproar. One is not surprise this new proposition from government is generating lots of misconceptions. It is a pity government does not learn from history. If government wants to do this effectively, one expects a level of engagement and enlightenment which help people to know the difference between luxury tax, which does not affect majority of the populace, and general tax which cuts across strata.


Let us also consider the new bank charges total 5% on deposit and withdrawal of over Five Hundred thousand naira in personal account and over three Million for corporate account. My little understanding of this is that as long as one does not transact cash, individual and corporate organizations are exempted from such charges. I mean what is wrong in this if everyone understands the challenges and logistics associated with cash movement?


More over this will curb corruption and money laundering common among the supposed rich people or corrupt elements amongst us. I mean why will an individual want to risk carrying Five hundred thousand naira around in this age? While will a corporate organization, even if it is MSME risks its hard earned money in this age of kidnappers and thieves? The uproar again to me is lack of education and consultation and proper briefing of the populace.


When a government thinks it has the capacity to wake up and force a supposed bitter pill down the throats of its audience without adequate information, misinformation and propaganda become the order of the day. It gives room for many informed minds who may be aggrieved or affected by such policy to deliberately engage in public misinformation through several media channels available to us today.


One other issue is the partial border closure. Whether we agree or not, lots of shady deals go round in our land borders. Land borders offer opportunity for different items, including food, to find their ways into our country. Some of these items may be inferior and at the long run affect internally produced goods’ purchase. For long we have become import dependent we even import pencil and tooth picks.


Just because there is partial closure, prices of rice, not local, had gone up. The attendant result is hue and cry against the government of the day.


All these contributed to our foreign exchange downgrade and Naira had continued to fall beyond what is reasonable. Today, government is being blamed for all these. Yes government has a part to play. It should create enabling environment which can promote local production amongst other factors. Government has been unable to develop perceivable strong political will in many areas such as maintaining one digit loan facility etc.


Despite all the above, if government had consulted and enlightened the public by preaching loudly the message of let us ‘eat what we produce’ which is backed with effective communication for why land borders have to be partially closed, there are higher chances people will not revolt.


I think it is not too late to start.Government needs to make use of all its agencies responsible for education and enlightenment instead of hiring them to occupy space. Government needs to know it cannot achieve much with this present style of leadership and policy communications.