Some businesses and traders may be taking advantage of the newly introduced tax laws to arbitrarily increase the prices of goods and services in different parts of the country.
Since the commencement of the new tax laws in January, the Federal Government has maintained that the laws would reduce certain taxes and stimulate growth without short-term revenue increases.
However, recent developments indicate that some business owners are already raising the prices of their goods and services, attributing the hikes to the tax laws.
The increases have come in the form of Value Added Tax charges and other general price adjustments.
The controversial tax regime became law on June 26 when President Bola Tinubu signed four major tax reform bills into law, marking what the government has described as the most significant overhaul of the tax system in decades.
The laws are the Nigeria Tax Act, the Nigeria Tax Administration Act, the Nigeria Revenue Service (Establishment) Act and the Joint Revenue Board (Establishment) Act, all operating under a single authority, the Nigeria Revenue Service.
The NRS had, last December, said the new tax laws were designed to strengthen economic competitiveness, attract investments and improve long-term fiscal stability.
The agency also said the much-debated four per cent development levy on imported goods is not a new or additional tax burden, but a streamlined consolidation of several existing levies.
The exempted items
Under the new tax laws, a list of items mostly used by Nigerians are exempted from VAT payments. These include basic food items such as rice, beans, vegetables and other unprocessed essentials.
Other exemptions include medical and pharmaceutical products, educational books (materials and services), electricity generation and transmission services, non-oil exports, agricultural inputs, diesel, petrol and solar power equipment.
Rents and goods meant for humanitarian projects are also exempt from VAT under the new law.
In addition, companies with annual turnover below ₦100 million are exempt from charging VAT entirely.
However, despite these exemptions, findings show that business owners, traders and SMEs in different parts of the country are exploiting the new tax laws to make extra gains on products and services.
In separate interviews, some business owners, retailers and traders confirmed the sharp increases in the prices of goods and services, citing the need to accommodate fresh tax payments.
The PUNCH