…Kicks Against Increase in VAT
The Association of Nigeria Licensed Customs Agents (ANLCA) has declared support for the introduction of a policy by the Central Bank of Nigeria (CBN) that cash deposits and withdrawals from individual bank accounts are to now attract additional charges, saying that it would further reduce corruption in the Nigerian port system.
The association has however kicked against Federal Government’s plan to increase Value Added Tax (VAT) from five per cent to 7.5 per cent.
Speaking with our correspondent at its national secretariat, Festac Town, Lagos at the weekend, ANLCA National Secretary, Alhaji Babatunde Mukaila said port users need to be less dependent on cash in their business dealings at the port, saying that use of cash further encourages bribe giving and bribe taking.
On the plan of government to increase VAT, Mukaila however expressed reservations, saying that a lot of VAT is being paid on the same transactions.
According to him, all payments of duties and tariffs at the port including Nigerian Ports Authority (NPA) Nigeria Customs Service tariffs have all been automated and can be paid online, hence there is no need to move around with physical cash.
The Director, Payments System Management Department at the CBN, Sam Okojere had announced last week that henceforth, 3 per cent processing fees would be paid for withdrawals and 2 per cent for deposits of amounts above N500,000 for individual accounts.
Similarly, corporate accounts will attract 5 per cent processing fees for withdrawals and 3 per cent processing fee for lodgments of amounts above N3 million.
The CBN said the charges would be in addition to already existing charges on withdrawals and will be aimed at encouraging its cashless policy.
Speaking with our correspondent on the policy, the ANLCA Scribe said “I think it is government trying to convince us and to make sure that we are less dependent on cash in our business dealings, and this is the best practice internationally”
“Just last week here, a New York Times photo journalist with a very sharp camera caught Trump with a ward of cash in his pocket as he was climbing the Air Force 1, this became an issue that, throughout this week it was a top discussion, the question is what is he doing with that ward of cash?”
“This policy is a better option because it is going to reduce this issue of burglary or people loosing a lot of cash, either through bike riders snatching bags and all that, it is the best option”
Alhaji Mukaila said that the 5 per cent processing fees for withdrawals and 3 per cent processing fee for lodgments of amounts above N3 million would only borne by non compliant port users with the government policy.
He said “Who bears the cost is that man who refused to comply with government cashless policy, the who rather than do online transaction decided to do cash withdrawal”
“Coming back to the basis, I think this policy would reduce corruption in the port system in the long run” he said
According to the CBN, the charge on deposits shall apply in Lagos, Ogun, Kano, Abia, Anambra, and Rivers states as well as the Federal Capital Territory.
The ANLCA scribe while condemning the introduction of VAT said “On the increase in VAT, I think I have my reservation, because technically speaking, a lot of VAT is being paid on the same transaction”
“For example, if I happened to be an importer and I brought in finished goods, that goods is Vatted at the point of customs duty payment, and if I sell it put to a supplier who happens to be a service provider of an eatery, i have a plastic plate that has been Vatted at the port, when the eatery also add up VAT at the point of delivery to their own client that is buying a pack of rice, if that is what is going on in Nigeria”
“I don’t see the reason why government should increase VAT because government ends up Vatting the same product like wight times, this is not in the best interest of an average Nigeria” he said