Nigeria among countries with lowest VAT- EU/ECOWAS

By Philip Shimnom Clement

The European Union and Economic Community of West African States’ delegation to Nigeria have revealed that the Value Added Tax system in Nigeria is low compared to other countries and also below the usual threshold.

The Head of Cooperation of the Delegation of the EU and ECOWAS to Nigeria, Massimo De Luca, made the disclosure on Monday at the 4th session of the Steering Committee of the Support Programme for Fiscal Transition in West Africa held in Abuja.

De Luca however gave the reason for the the low compliance with VAT in Nigeria to be corruption and poor implementation.

He noted that while some companies may be willing to pay their taxes, the current taxation system in the country does not allow them to do so.

De Luca said, “You think VAT works in this country? No, it doesn’t. Fraud makes the business environment unstable for long-term investment. The VAT system is not working because here we have a VAT system that does not allow companies to do what the VAT system is supposed to do- You charge VAT on goods and recover VAT from what you buy.”

He added that many companies in Nigeria may not recover their taxes through consumers, especially the Small and Medium Enterprises.

Earlier, the Chairman of the Federal Inland Revenue Service, Zacch Adedeji, said that the agency would make the taxation system in the country customer-centric so that, individuals and businesses could pay taxes easily.

He also noted that the FIRS would introduce a one-stop shop for all taxes in the country.