More Hardship as Nigerian Govt Propose Upward Review of VAT

Posted by Thandiubani on Thu 09th May, 2024 - tori.ng

Taiwo Oyedele, the Chairman of the Committee, disclosed this in a recent statement

Nigerians will soon face more hardship over FG's plan to review Value Added Tax, VAT from the present 7.5 per cent.

This followed a recommendation for upward review of VAT by the Presidential Committee on Fiscal Policy and Tax Reforms, according to DailyPost.

Taiwo Oyedele, the Chairman of the Committee, disclosed this in a recent statement.

He said the Committee is proposing to review the VAT revenue-sharing formula.

Oyedele added that the VAT review will not lead to a price hike.

“Nigeria’s economy is more than 50 per cent in services and if I just stop at this, many states will be broke because VAT collection will go down by more than 50 per cent, and it won’t even fly.

“Therefore, we need to adjust the VAT rate upward. We would ensure that it doesn’t affect businesses. The only thing to consider is essential consumption, including food, education, medical services, and accommodation, which will carry zero per cent VAT. So, for the poor and small businesses, no VAT.

“We have spoken to businesses about it, and they won’t increase the prices of the products. We want to make sure when we do VAT reform, no one will increase the price of commodities. We will work on mathematics with the private sector.”

He added, “We are proposing that the federal government’s portion be reduced from 15 per cent to 10 percent. States’ portion will be increased, but they would share 90 per cent with local governments.”

Meanwhile, the development comes amid the uproar resulting from the recent introduction of a 0.5 per cent cybersecurity levy on all electronic transactions in Nigeria.

Consequently, financial experts, Nigerians, and the Nigeria Labour Congress have lamented the rising tax burden in the country.