FG Plans Review of VAT To 7.5% In ‘Coming Months,’ Says Osinbajo

Vice President Yemi Osinbajo, on Saturday assured that whereas the Muhammadu Buhari administration has no plan to raisw personal income tax rate in the immediate future, it is hopes to increase coverage, or the percentage of the population in the tax net (that pay tax).
He said government hopes to review the Value Added Tax (VAT) rate “in the coming months to about 7.5%,” while as part of a broader tax reform, continuing to encourage people and companies to voluntarily pay taxes.
As part of the plan, according to Osinbajo who was addressing youths and women in his Abuja office, those who earn returns on their investments in foreign climes, are also to be taxed, just like shareholders of companies in Nigeria, who pay 10% of the value of their dividend income as withholding tax.
Fielding questions from his guests, Osinbajo lamented that “Nigeria has one of the lowest tax compliance (rates) 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 (negatively) affecting anyone’s business.
“We do not intend to increase personal income or corporate taxes in the immediate future…” he added.
In s series of tweets on his personal handle, the Vice President recalled being asked also questions about whether he had a free hand to run the economy, taxes, electronic transaction bills, local government autonomy, during the no-holds-barred evening of conversation.
Questions, he noted, also centred on whether the administration disobeys court orders, ease of doing business in Nigeria, the Southern Kaduna crisis and a host of others.