Nigeria confirm VAT rise

Nigeria to raise VAT to 10%

Nigeria have confirmed plans to increase the VAT rate to 10%, making it double the current 5% VAT rate, with changes expected to come into affect later in the year.

This increase is due to the recent slide in oil prices that has seen the price drop 100% in the last 14 months alone, this drop has had a big impact on the Nigerian economy as 80% of the governments income comes from petroleum exports, the current war with Boko Haram is also proving costly to the country. This was recently confirmed after talks with stakeholders took place earlier this year, see our previous post  Nigeria propose VAT increase.

Nigeria VAT increase

Nigeria – VAT Increase

The Nigerian government has proposed a potential increase in their VAT rate to 10%, double the current VAT rate of 5%. Due to the recent oil price crashes Nigeria, one of the biggest exporters of crude oil, has face significant financial losses, if the price of oil continues to fall the government will introduce the VAT rate change in order to help cover the losses. However no decision is to be made until the oil price stabilises and Nigeria can further assess its position.