Nigeria is to double the rate charged on Value Added Tax (VAT) from its present 5% to 10 per cent before the end of this year.
Acting Executive Chairman of Federal Inland Revenue Service (FIRS), Sunday Ogungbesan, said though plans are not finalised, the move was to help improve the country’s income, given the declining price of oil at the international market.
“The plan is to increase to 10 percent this year, but we have to consult first with relevant stakeholders,” he said
Ogungbesan added that the FIRS will direct its strength in improving its performance. The Service targeted at collecting N2.29 trillion in the first half of the year, but ended up collecting N1.97 trillion ($9.9bn).
“If we achieve our revenue targets, to a great extent, government deficits will be reduced.
“Our plan is to bring every business into the tax net; this economy can survive outside oil,” Ogungbesan said.
More than 70% of Nigeria’s income is from oil export, but the price of oil in the international market has fallen since last year, inflicting a serious injury to the country economy.