In this business interview on Plus TV Africa’s business news, Lanre Akinbolajo, a Manager in the Oil, Gas and Power group at Andersen Tax explains the reason for the tax increase. He says one of the objectives is to increase in the tax revenue for the government.
Nigerians are currently concerned with the 7.5% VAT that was implemented after the increase in the minimum wage. Before the increase in tax, the VAT was at 5%, meaning there has been a 2.5% increase in the tax.
VAT – Value Added Tax is a consumption tax that is placed on goods whenever a value is added at each stage of production. The type of tax is paid by every consumer who eventually purchases the item, so no one will be exempted.
Concerns have arisen concerning the implementation of this VAT on exempted items but Lanre Akinbolajo said the people to blame for this issue are business owners who refuse to comply with this rule, such as supermarkets who apply the VAT on all items they sell.
For restaurants who do the same, an item like bottled water is exempted from VAT but restaurants still add the VAT when a customer purchases this item. He concluded that the government should sensitize these businesses and ask them to remove the VAT from the exempted items.