If, as proposed by the Presidential Committee on Fiscal Policy and Tax Reforms during the week, the current Value Added Tax (VAT) rate is increased to 10 per cent from the current 7.5 per cent, it is certain that consumers will pay more than they currently do for many items. There are, of course, VAT-exempt items, but if the prices of other items rise on account of the implementation of the proposed VAT rate, their own prices will not remain the same.
The current VAT rate is barely four years old and the government is mulling a review because it needs more revenue in addition to the one it is currently getting from last year’s fuel subsidy removal. I am all for increased government revenue, especially from non-oil sources, as it expands the government’s capacity for service delivery. Theoretically, that is. I say this because in our peculiar country, where governments at all levels freak out when there is more money, it is not necessarily so.
The proposal, for some reasons, has not provoked the kind of public anger it should, perhaps because it has not been accepted. The recent announcement of the cyber protection levy to be charged on bank transfers has provoked greater anger. Neither of the two has provoked the scale of public anger at the recent tariff review by pay TV Company, MultiChoice Nigeria. I also wish to add that while the earlier announced electricity tariff hike got people angry for a few days, it soon dissolved into a joke.
We are, I must admit, quite good at making light of very serious issues, including life-threatening ones, the reason we are viewed as some of the happiest people on the planet. There was a surfeit of gags and memes on the band electricity consumers were placed into by the power distribution companies, after which we all took it on the chin. That has not happened with the MultiChoice price increase, which got social media platforms and everywhere you turn fizzing with rage. In fact, it never happens. If we are not campaigning for a boycott of its services, we are calling on the government, whose policies are messing up things, to squeeze MultiChoice till it leaves Nigeria.
On Wednesday, a tribunal of the Federal Competition and Consumer Protection Commission (FFCPC) resumed hearing in a case filed by a lawyer, Festus Onifade, contesting the right of MultiChoice to increase prices. The tribunal had, on 29 April, ordered MultiChoice to halt the announced price increase. This was sequel to the receipt from MultiChoice by the FCCPC’s acting Executive Vice Chairman, Dr. Adamu Abdullahi, a document stating reasons for the price review. Abdullahi promised to review what he received.
The very curious thing for me is that two years ago, the tribunal dismissed a similar case filed by the same applicant, who has since returned. It seems that the tribunal is established strictly for the purpose of reviewing MultiChoice price adjustments because it has no record of looking into rates charged by other private businesses. The FCCPC itself, as the tribunal ruled two years ago, has no power to regulate prices. I suspect that the FCCPC and/or the lawyer is getting kicks from the media attention this generates. I cannot see any other motivation.
The FCCPC is not alone. The National Assembly (NASS, for short), pardon my language, self-pleasures the same way. Its two chambers rarely concern themselves with stratospheric living costs, marked by consumer prices rising daily. Inflation at above 30 per cent is of little importance. Food inflation is treated like a minor irritation. But the NASS stops just short of asking for the declaration of a state of emergency any time MultiChoice increases prices. One chamber issues a resolution for an immediate price freeze, while the other issues one for a billing model. Neither bothers about the main economic issues bedeviling the country. MultiChoice may need to go for deliverance, as Pentecostals would say. Why?
It is the only private business for which people want to legislate prices. Nine years ago, two lawyers had their case against MultiChoice’s right to increase prices dismissed by a Federal High Court, which ruled that they were not obligated to use its services. We saw another dismissal by the FCCPC Tribunal in 2022. The tribunal, whose jurisdiction MultiChoice has challenged, heard another one until Wednesday. Last year, the National Association of Nigerian Students (NANS) threatened to attack MultiChoice offices if it did not bring down prices. This year, the same association, completely indifferent to the soaring costs of education and cost of living, has called on the Federal Government and NASS to compel MultiChoice to go back to its old prices.
It is a mystery that nobody is taking bakers to court for increasing the prices of bread, rice sellers for increasing the prices of rice, yam sellers for raising the price of a tuber to N4,000 or campaign for the boycott of our port because of too many charges to importers.
Over the last four months, several brands, particularly in the fast-moving consumer goods market, have increased prices multiple times. These increases often go unnoticed, unlike MultiChoice’s. Prices of carbonated soft drinks have doubled in recent months, with a bottle of Pepsi now selling for N350 or more. Meanwhile, members of the “Saint Bottles Cathedral” are now paying N700 for the cheapest beer, up from N500 two months ago. Despite these price hikes, many remain silent. However, the same individuals are among those criticizing DStv subscription prices.
A few days ago, I stepped out onto my small balcony for some fresh air, only to find the air stifling and filled with smoke from a nearby source. Investigating, I discovered a charcoal stove in a neighbour’s compound, as they had been priced out of cooking gas, now selling for N1,500 per kilogram.
I recently saw a woman, whose husband is a vociferous social commentator, lament bitterly on a social media platform, about how she bought a carton of a particular brand of milk for N56,000 in January and had to fork out N92,000 for the same content in April. Surprisingly, her husband remained silent about this. While milk is considered an essential commodity, such a drastic price hike failed to capture his attention. Yet, shortly after MultiChoice announced its price increase, he took to social media to publish an epistle.
Like many other service providers, MultiChoice has done nothing wrong with its recent price adjustments; it is Nigerians who need to adjust their mindset towards the company. Therefore, its price adjustments should be viewed in the same light as adjustments for other commodities.
● Kayode Falua writes from Abuja
