FG should increase VAT rates – Tax Reforms Chief Oyedele

THE CABLE

The presidential committee on fiscal policy and tax reforms says there is a need to increase the value-added tax (VAT) rate.

Taiwo Oyedele, chairman of the committee, spoke on Monday while disclosing that the VAT revenue-sharing formula would be reviewed.

He spoke at a policy exposure and impact assessment session organised by the committee.

Nigeria’s VAT rate is currently 7.5 percent.

Oyedele also said the committee has proposed reviewing state and local governments’ share of VAT revenue to 90 percent.

According to section 40 of the VAT Act, the federal government gets 15 percent of the tax revenue, states share 50 percent, and local governments share the balance of 35 percent.

However, Oyedele said the committee is recommending reducing the federal government’s share from 15 percent to 10 percent.

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

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