Home Business FG Plans VAT Increase In Push To Raise Non-oil Revenues

FG Plans VAT Increase In Push To Raise Non-oil Revenues

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Nigeria plans to increase value-added tax on goods, the finance minister, Zainab Ahmed said, as Africa’s biggest oil exporter seeks to reduce its reliance on crude sales.

While addressing journalists late on Wednesday after a cabinet meeting, said the government proposed raising VAT next year to 7.2per cent – up from five per cent. The current level is one of the lowest in the world.

The planned rise must be approved by parliament before it can become law.

President Muhammadu Buhari’s government has repeatedly said it wants to boost non-oil revenues since oil sales make up 90per cent of foreign exchange receipts. Raising more money from taxes has proved difficult in a country where so many small business are not registered.

Ahmed said the cabinet approved the proposed VAT rise when it met on Wednesday.

“This is important because the federal government only retains 15per cent of the VAT, 85per cent is actually for the states and local government. The states need additional revenue to be able to meet the obligations of the minimum wage,” she said.

 

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