FG Will Soon Increase VAT to 7.5%—Osinbajo
By Modupe Gbadeyanka
Vice President, Mr Yemi Osinbajo, has hinted that the Federal Government plans to review the Value Added Tax (VAT) upward to about 7.5 percent in the coming months.
Mr Osinbajo made this disclosure during a chat on Tuesday with “some bright young men and women at the Aguda House” in Abuja.
During the meeting, the Vice President, however, said “we do not intend to increase personal income or corporate taxes in the immediate future.”
He noted that, “But we do have plans to review VAT in the coming months to about 7.5 percent.”
Mr Osinbajo disclosed that, “Nigeria has one of the lowest tax compliance in the world. One of the issues we have is with coverage.”
“Last year, 400,000 new corporations were added to the tax net. We have also begun civil and criminal actions against defaulters but it is an option we try to avoid because we are not interested in affecting anyone’s business. The priority of the government is to increase coverage,” he added.
The number two citizen of Nigeria emphasised that, “The plan is to continue to encourage people and companies to voluntarily pay taxes as part of a broader tax reform and also tax people who earn returns on their investments in foreign climes.”
At the moment, FG charges 5 percent as VAT on some goods.