Nigeria raises VAT to 7.5% 2020
- Sep 12, 2019 | Richard Asquith
The Nigerian government has proposed raising the Value Added Tax standard rate from 5% to 7.5%. The rise will need the agreement of the National Assembly, states and local government. The federal government only retains 15% of VAT - the balance goes to the 36 states and local government. The increase will likely be put into place on 1stJanuary 2020.
The increase is required to help reduced the government deficit as oil prices remain subdued. Oil accounts for 90% of foeign currency earnings in the country. The country has struggled to finance debt servicing costs. Nigeria has just announced plans to implement VAT on foreign e-commerce business selling to local consumers.
The average African VAT rate is 16%.