The recent announcement in a national newspaper by a committee set up to review the taxes and charges paid by airlines that it would recommend the removal of the Value Added Tax, VAT, from airlines charges is not only a step in the wrong direction, it is premised on the wrong assumptions.
To begin with Nigerians already pay the least VAT, five per cent, in the entire world – a situation that has contributed in large measure to our rising debt ceiling. That in turn is threatening to return the country to the situation in which we found ourselves before we were rescued from the dent trap in 2004.
For years now successive governments of Nigeria had recognized the need to increase our VAT rate but every single one of them has lacked the will to increase the VAT rate and move it closer to global standards.
Clearly, a recommendation to remove airlines from paying VAT is not only taking the country two steps backwards, it demonstrates that the Minister of State for Aviation, who chaired the committee does not have a good grasp of what VAT represents. The claim that airlines pay VAT is a fallacy at best and a deliberate lie at worst.
VAT is a consumption tax – meaning that the user pays the tax and not the airline. And, at five per cent, it cannot be the reason for the rest of the charges to be exorbitant. At any rate, if you don’t fly, you don’t pay. No other nation in the world has excluded airlines from paying VAT – even in countries like the US where over sixty per cent of the citizens fly regularly. By contrast, less than three per cent of Nigerians patronize airlines. Meanwhile, the vast majority of the people who don’t fly and will never fly are required to pay VAT for basic items like detergents, food items, medicine, clothing etc while the elite who fly are to be excluded from VAT. Where is the equity?
Nigerian airlines are unprofitable for many reasons and VAT is not one of them. For instance, too many of them have only one profitable route – Lagos to Abuja. But, they struggle to extend their services to places like Gombe, Yola, Ibadan, Sokoto and Asaba/Warri despite the dearth of passengers. Capacity utilisation, not VAT is their major problem; corruption is another. Despite the rules regarding luggage, the owners will literally faint each time they visit their check in counters and watch how their staff connive with passengers to deprive them of revenue from excess luggage carried on board.
Too often, the corruption is rooted in nepotism. That is the appointment of relatives to important posts in the false belief that they will reduce corrupt practices. In actual fact, they become untouchables even when incompetent.
Senator Hadi Sirika’s committee’s proposal should be rejected by the FG and by the National Assembly, NASS, if a bill is sent to exclude airlines from VAT. It certainly makes no sense – which ever way one looks at it.
KANO TO NIGER REPUBLIC RAIL LINE: MATTERS ARISING.
The proposed Kano- Niger Republic which will cover 248km and pass through seven senatorial districts in three states of the North — Jigawa, Kano and Katsina – is supposed to facilitate the supply of crude from Niger Republic to a refinery to be built in a border town close to Katsina state. The rail line is already in the 2018 budget – although no amount has been mentioned.
Obviously, Katsina state and Daura city, where President Buhari comes from will benefit twice from the two projects while most of the thirty five states of Nigeria cannot point to any major development in the nearly three years of Buhari administration.
The proposed rail line is at focus of our attention at the moment because it once again demonstrates the charge of parochialism leveled against Buhari with mounting evidence to sustain the charge.
The All Progressives Congress, APC, among other promises, used the Lagos-Ibadan commuter train service, the Lagos to Calabar rail line and the Eastern line to woo voters in 2015. Today, the Lagos-Ibadan line remains a mirage as the deadline for completion keeps changing farther into the future. The Lagos-Calabar line is seldom mentioned anymore and has probably received very little vote in the 2018.
With three rail projects which would pass through over twenty eight states of Nigeria uncompleted, the Buhari administration is now embarking on a new one which will benefit mostly Katsina state and Daura. The irony of a President proclaiming his innocence, when charged with inequity and parochialism, while at the same time taking measures to confirm the charges, can only be lost on Buhari. Under Buhari, Nigerian democracy has now become one state centred. Everything is now about Katsina and Daura.
Fortunately, the National Assembly, NASS, has a strong influence on the budget to be passed. We believe that the NASS should insist that the rail lines that will benefit almost all the states of Nigeria should take precedence over the one that will pass through Daura. Buhari has apparently lost any sense of balance. The NASS, as representatives of all Nigerians must provide the checks and balances which the President obviously lacks.
At any rate, the combination of a rail line and refinery, with Katsina and Daura as focal points, suggest a hidden agenda serving future parochial interests — for which the rest of us are expected to pay. One looks in vain for these projects in the APC manifesto. Whose interests will they serve?
IGP BIASED AND INACCURATE SHOULD STEP DOWN
Any nation’s chief law enforcement officer must exhibit total impartiality when major crimes are committed. The minute the Inspector General of Police, IGP, or his equivalent in ahy country is revealed to be biased, he has become a threat to justice and might even become an accessory after (or even before) mass homicide occurs.
Mr. Idris, Nigeria’s IGP, has created problems for the country, for the President, and for himself, which can only partly be resolved if he steps aside now. He will not like it; and Buhari might be reluctant to le him go. But, his continuing presence in that office poses enormous dangers to the nation.
The IGP was on record for stating that the massive and relentless killing of people in various communities in Benue and other states resulted from “communal clashes”. The recent massacre of people in Benue and Taraba states forced him to apologise and to admit that the killings were premeditated by the herdsmen. But, before Nigerians could heave sighs of relief and hope that the Nigeria Police under Idris will now get serious and work impartially to apprehend and prosecute the killers, the IGP once more dashed all hopes with his comment on the causes of the genocide.
When the IGP asserted that the killings were caused by the anti-grazing laws passed by Benue and Taraba states, he was not only telling a big lie, he was justifying the genocide. More to the point, he has indicated that the Nigeria Police under his leadership will not investigate, apprehend and prosecute any of the killers.
Surely, the IGP must remember that the sack of Agatu in which over three hundred Nigerians lost their lives occurred in April 2016 when Benue had no law prohibiting grazing. Enugu State had no anti-grazing law in the same 2016; and none today. Yet, in 2016 Nimbo was almost totally wiped out by herdsmen. Attacks had since occurred in Plateau and Ondo states where no law forbidding grazing had been passed. Obviously, it is totally false and illogical for the IGP to attribute the killings to a law which does not even exist in many states which have nevertheless been attacked.
For reasons best known to Mr. Idris, he is unwilling to act against the herdsmen and asking him to relocate to Benue is pointless. He should be asked to relocate out of the IGP office to allow Nigeria to have an IGP who has not lost the confidence of millions of Nigerians.
MAKING ERGP APPEAR LIKE A MISSION IMPOSSIBLE
The Federal Government’s announcement that $245bn is needed in four years to implement the Economic Recovery and Growth Plan, ERGP has now turned this laudable project into a mission impossible. For instance the 2018 budget estimated at N8.4tn or $26.67bn will need about twenty per cent debt to fund it properly at official exchange rates. The $245bn required to fund ERGP represents nine times the current annual budget. Thus, what this proposal amounts to for those not trained in economics and finance is simple. The FG is proposing to spend in the next four years three times the equivalent of this year’s budget for the plan to work.
Even the fact that the FG is only required to invest only $49bn while the private sector is expected to kick in N196bn is not reassuring. An undisclosed percentage of the governmnet’s contribution to the plan will have to be borrowed thereby raising the current debt ceiling to almost double what it is now. Meanwhile, virtually all the global financial institutions consider Nigeria’s current debt payment burden unsustainable. Doubling or tripling our debt repayment schedule will render the project almost impossible to execute.
Just as worrisome is the assumption that the private sector will readily contribute $196bn just because the FG regards the ERGP as the only solution to all our economic woes. That might not be the case. Corruption, which has robbed Nigeria of all economic dividends of previous investments, remains unchecked. Today, just as in the past, corrupt officials of government are routinely pardoned and reinstated by the Presidency thereby making crime pay handsomely for the well-connected.
The fact is, nobody can guarantee that the returns on investment envisaged will be realized while the debts will mount astronomically. Even the Gross Domestic Product, GDP, growth rate projected might not be achieved as incompetents are appointed to manage critical sectors. NNPC is an example.
We agree on the need for the ERGP. But, we strongly believe that an investment of this magnitude should be deferred until after the 2019 elections. Then a new government with four years mandate to govern can revisit it and if approved have four years to implement it; not a government that might be transient.
SELF-PROTECTION IS THE SECOND STEP TOWARDS ANARCHY.
Four years ago, only the Northeast part of the country was threatened by Boko Haram, BH. The All Progressives Congress, APC, especially their National Publicity Secretary, Alhaji Lai Mohammed, ritualized the call for former President Jonathan to resign if he could not bring the situation under control. Today, the Federal Government, under the APC, and with Lai Mohammed as the Minister for Information, has watched obviously helplessly as Fulani herdsmen have wasted lives and properties with impunity everywhere in Nigeria.
Buhari, the APC candidate in 2014 and Mohammed have offered the nation no solution to the problem. Furthermore, while Jonathan was justly criticized for ineptitude in handling BH, the former President was never accused of being a patron of the Boko Haram and a possible accomplice. Buhari is in fact a Life Patron of the Miyetti Allah Cattle Association of Nigeria, MACAN and has been for a long time.
So the immunity the MACAN has enjoyed and the impunity with which they commit genocide and get away with it has resulted in a situation in which the President and the security officers, especially the Nigerian Police, are no longer trusted by a lot of Nigerians to protect them.
Consequently, the Governor of Benue has recently asked his people to protect themselves against attacks. In the South West, two separate protection groups are being called upon for the security of the zone. Soon other parts of the country might take the matter into their own hands because the FG has failed woefully in its primary duty to protect lives and properties. When that happens, anarchy has visited the nation.
It will amount to a mistake of monumental proportions for anybody to think the army can contain the anarchy. Operation python dance etc are effective when only a small area is being intimidated. The army will be stretched beyond its capacity if the disturbances are widespread and the military itself become divided along ethnic/state lines.
Furthermore, with millions of illegal firearms in private hands all over Nigeria, the next national civil strife will not be as easy for our men and women in uniform as the first one. This one will be deadlier, last longer and the end result is unpredictable.
The FG, especially the President, needs to move quickly to avert the looming anarchy which self-protection will bring.