Governor Dave Umahi of Ebonyi state on Wednesday said the proposed plan by federal government to increase Value Added Tax (VAT) from 5% to 35% in order to pay workers’ salaries would put the country in difficult situations.
The governor who described it as digging a hole to fill a hole, also called on organised labour to sit down with government to consider the plan.
He made this known in Abakaliki while addressing staff of his office who were celebrating his re-election victory.
He said: “I saw in a paper where federal government is considering lifting VAT to 35% to pay salaries. It is all about digging a hole to fill a hole because we have not come to point of realisation or honesty about how to solve our problems and it is important.
“Federal government is borrowing money; state has been banned from borrowing money. And so, if VAT is lifted from 5% to 35% which means that any of us that is going to buy anything is going to pay 30% of what we have been paying. It is important that labour sits down with government.”