Thursday, 3 March 2016

This might be the reason why that 100 Naira recharge card was insufficient for you


Are you wondering why that 100 naira airtime you bought was insufficient for you to
to finish your conversation with your mum? it's not because she talks slowly, it might be because the 100 Naira you spent on airtime actually bought you 95 naira worth of credit.
How? Have you ever heard of the term VAT? VAT simply means Value Added Tax. It is that compulsory amount of money the government charges you and me for purchases we make or when we request for professional services from a lawyer, an accountant, an engineer e.tc. In a conversation with Mr Chukwudi, he swore to me that he will never pay tax because Nigeria is corrupt. Then I asked him, have you ever bought a recharge card? Have you ever bought a bottle of beer? Have you ever bought a T.V set? He answered yes to all, then I told him ‘brother you have been paying tax o..’ he was shocked when I explained to him about Value Added Tax. Value Added Tax was introduced in Nigeria in the year 1994 after some tax reforms. It replaced the Sales tax. The beautiful thing about VAT is that you cannot avoid it and you pay it willingly without anyone forcing you to pay. The VAT list consists of 33 categories of items for which you pay VAT when you go to buy these items ranging from your everyday recharge card to buying of cars.
How much am I paying as VAT? Since 1994, VAT has been charged at a flat rate of 5%, so 5% of any amount you pay for the goods and services that have VAT goes to the government. If Mr Chukwudi buys a 100 naira recharge card, he pays the government VAT equal to 5% of 100 which is 5 naira, so he’s going to enjoy only 95 Naira of credit, if Kunle buys a bottle of Hero beer for 200 naira, he pays the government VAT of 5% of 200 Naira = 10 naira; if Tatafo Plc pays an accountant 100, 000 naira for a job, the company pays the  government a VAT of 5% of 100,000 Naira = 5,000 naira. When this VAT are collected by the companies selling these products to you (such as MTN, Nigerian breweries, Dark n’ lovely etc) they pay the money collected as VAT to the government at the end of the year. In 2014 alone, the federal government of Nigeria collected about 806 million from VAT, despite the fact that so many companies are collecting VAT and not giving them to the government. However, there are some goods the government excludes for the collection of VAT, they include House Rent (so if your husband wants you to pay VAT, tell him that the Devil is a liar), food stuff and food items, drugs, medicine and pharmaceutical products, medical services, baby products farm tools and implements, educational books, newspapers and magazines. These items are free of VAT.
So, if you buy any other item apart from the ones written above; you can hold your head up high, beat your chest and tell yourself, I am a good Nigerian, I pay my Tax. We all pay tax, directly or indirectly. COMMENT BELOW

6 comments:

  1. Lol....that same feeling I always get when I remember that too #ProudlyNigerian #ForTheLoveOfCountry 😊☺️

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  2. My dear....i haff taya for my beloved country. Seems i will relaocate to Togo.

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    1. lol...relocate for what na?....Nigeria is our home

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  3. Talking about Nigeria, will be coming for a 2weeks vacation with my 2 sons April 7th-13th. Precisely staying at Calaabar. Hope to have a good time!

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    1. I hope so too...Safe trip, enjoy your stay.

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