The Presidential Fiscal Policy and Tax Reforms Committee has proposed a significant increase in Value Added Tax (VAT) from the current 7.5% to 10%.
The announcement, made by committee chairman Taiwo Oyedele on Channels TV’s Politics Today, has sparked debate and concerns among businesses and taxpayers.
Oyedele explained that the VAT hike is part of a broader effort to consolidate multiple taxes in Nigeria and ultimately reduce the overall tax burden.
The committee is currently working on a draft tax law that will be submitted to the National Assembly for consideration.
While the proposed VAT increase aims to generate additional revenue for the government, it has raised concerns about its potential impact on businesses, particularly SMEs and entrepreneurs.
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A higher VAT rate could lead to increased costs for businesses, which could be passed on to consumers in the form of higher prices.
The proposed tax reforms are a complex issue with both potential benefits and drawbacks. It remains to be seen how the National Assembly will respond to the committee’s recommendations and whether the proposed VAT hike will be approved.
The potential implications of the VAT increase for SMEs, entrepreneurs, and businesses at large are significant. If implemented, the higher VAT rate could affect profitability, investment decisions, and competitiveness.
It is crucial for policymakers to carefully consider the potential consequences of this measure and take steps to mitigate any negative impacts on the business community.
