The Lagos Chamber of Commerce and Industry has expressed concern over the 2019 Finance Bill signed into law today by the President, Major General Muhammadu Buhari, stressing that the increase of Value Added Tax would adversely affect businesses.
LCCI Director-General, Mr. Muda Yusuf, made this known in a statement made available to newsmen on Monday in Lagos.
Yusuf, who commended the president for signing the bill into law, said it would improve the government’s revenue at all levels and enhance their fiscal positions.
He, however, expressed concern over the impact the Value Added Tax increment would have on businesses and end-users from the cost pressure perspective, due to the high cost of operating businesses in the country.
With Buhari’s assent of the Finance Bill into Law, VAT in the country jumps from five percent to 7.5 percent.
Yusuf explained that it was inappropriate to compel loss-making firms to pay tax, no matter how little.
He said, “The finance bill has a number of favourable provisions for small businesses and this is an aspect to commend.
“However, the VAT increment would impact adversely on businesses from cost pressures perspective.
“Margins would be affected, depending on the extent to which additional costs could be passed to consumers.
“We worry that we are operating in a high-cost environment and also have the worry about the provision on minimum tax which we had argued against this provision.
“It is inappropriate to compel loss-making firms to pay tax, no matter how little. This amounts to erosion of capital,” he said.”