Gom Mirian
In a bid to enhance the Nigeria’s non-oil revenue, the World Bank has advised that the country’s Value-Added Tax (VAT) rate should be increased.
This suggestion was featured in the World Bank’s recent Nigeria Development Update (NDU) titled “Turning The Corner, From Reforms and Renewed Hope to Results,” which was launched in Abuja on Wednesday.
The recommendation entails increasing the current VAT rate of 7.5 per cent, to create more space and generate higher non-oil revenue
However, the bank insisted that this increase must consider input tax credits and exemptions on petrol should be eliminated to achieve the desired outcome.
The report emphasises the urgency of augmenting non-oil revenues by raising the VAT rate, while also permitting input tax credits.
Additionally, it encourages improving tax administration through a data-driven approach to tax audits, while proposing introduction of a simpler turnover tax on Small and Medium-Scale Enterprises (SMEs) at the state level, as opposed to the numerous existing fees and levies.
