Vice-President Yemi Osinbajo says the new value-added tax (VAT) rate of 7.5 percent is still low when compared to that of other African countries.
NAN quoted Osinbajo as saying this while speaking at the Inspiration Conference 2020 organised by the Redeemer’s Men Fellowship in Lagos on Saturday.
President Muhammadu Buhari recently signed the finance law which increased VAT by 50% from the initial rate of five percent.
Osinbajo said the finance law would speed up Nigeria’s economic growth and result in increased revenue for all levels of government.
He was also quoted as saying the new VAT rate is not as high as it is being asserted, especially when it is compared to that of other African countries.
“Ghana has 12.5 per cent; Cameroun has 19.25 per cent; Mexico with 16 per cent; South Africa at 15 per cent and Egypt at 14 per cent,” Osinbajo reportedly said.
“To make things easier for the common man, we have exempted 16 classes of food items, tampons, sanitary towels, and tuition fees from nursery to tertiary.
“Also, before the Finance Act, many companies operating in the country without physical presence escaped taxation.
“Most digital companies made significant revenue from e-commerce, online advertising and the likes, but were not taxed.”
The vice-president expressed confidence in the Nigerian economy, saying the government would continue to provide the enabling environment for businesses to thrive.
TheCable had reported the ways the new law would affect the country, including increased revenue from services provided by non-resident companies and exemption of companies with less than N25 million annual revenue from VAT and company income tax.
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