‘VAT increase could worsen housing deficits’
By Cornelius Essen, Abuja.
20 January 2020 | 2:59 am
Experts in the real estate sector have lamented that the recent 50 percent increase in Value Added Tax (VAT) will impact negatively on housing supply in the country
They stressed that its implementation would affect the delivery of affordable houses. According to them, the increase was ill timed and could slow down construction as developers are still battling with economic difficulties. Speaking with The Guardian, the Executive Director of Shelter Origins, , Mr. Ezekiel Ojo, said, the increase in tax will have a cumulative effect on the prices of cement, sand, timber, paints, plumbing materials, electrical materials, all goods and services, and impact negatively on affordable housing.He noted that affordable housing doesn’t come in isolation, but produced from the use of different elements that would be affected by the tax.
Ojo advised government to make low-income houses highly subsidised as seen in other countries of the world by developing a policy thrust on it.
“The Federal Government should subsidize housing and make it a social programme so that it should be part of the common wealth of the citizenry.”
On his part, the Managing Director of Numatville Projects Limited, Dr. Akin Olowookere, said government shouldn’t have made the increase in VAT all encompassing but give an exemption for the housing sector.“ It should not apply to low income and middle class. There should be exemptions in terms of affordable houses, because we are not out of it as far Nigeria is concerned”, he added.To Mr. Sam Odia of Millard Fuller Foundation, MFF, he said, “Prices of good and services would go high, and it could be worse for low-income earners, and hope of hoping homes by Nigerians could be difficult. Nigerians should be able to access housing on terms they can afford.”