By Henry Boyo
ON September 11 this year, Hajiya Zainab Ahmed, Nigeria’s Finance, Budget and National Planning Minister, briefed State House Correspondents, of government’s plan to raise the Value Added Tax rate from five per cent to 7.5 per cent, i.e. about 50 per cent increase on the existing rate.
The decision to increase VAT rate, at this time, may not be very popular, as inflation, has, oppressively remained above 10 per cent for several years, and this has predictably, gradually eroded, at least 50 per cent, of the purchasing power, of all income earners, in the last five years. Thus, the N18,000 static Minimum Wage, for example, would command, barely N9,000, in real purchasing value after five years, because of irrepressible inflation rates, and Naira devaluation.
Similarly, the new N30,000 ($98) Minimum Wage, also, has less intrinsic value than the preceding Minimum Wage of N18,000. The collateral erosion of consumer demand, caused by lower purchasing power…
Source: Vanguard Newspaper