Nigeria’s VAT Performance Lowest In West Africa – FG

The Federal Government, on Tuesday, raised concern over the performance of the Value Added Tax (VAT) in Nigeria as the lowest in the West African region.

While describing the development as worrisome, the government stressed the need for a change in policies, adding that the country’s VAT rate was less than one per cent to the Gross Domestic Product.

The Director of Tax Policy in the Federal Ministry of Finance, Budget and National Planning, Basheer Abdulkadir, raised the concern at the opening event of a three-day workshop on the harmonisation of Nigeria’s VAT Act with ECOWAS directives.

The programme was organised by the ECOWAS Commission under the context of implementation of support Programme for Tax Transition in West Africa.

The PATF aimed to improve management of domestic taxation and ensure better coordination in ECOWAS and West African Economic and Monetary Union regions.

Abdulkadir who stated that exemptions of VAT in Nigeria was not aligned with those of ECOWAS, called for the exemption of few products, goods and services from VAT, for poor households to benefit from VAT policy.

He said, “Our VAT performance or rate is still one of the lowest. Nigeria has a VAT of less than one per cent to the GDP and this is worrisome. Also, we have the lowest VAT within the sub-region with an average of 16 per cent, while VAT rate in Nigeria is 7.5 per cent. So we need a lot of policy changes on tax administration as we also need to come up with strategies to address some of these issues.

“Also, the exemptions of VAT in Nigeria is not aligned with those of ECOWAS and we know that these exemption are some of the issues to do with revenue mobilisation under the VAT. We need to align our exemptions with ECOWAS directive.”