The federal government has said that the performance of the Value Added Tax in Nigeria is the lowest in the West African region.

Director of Tax Policy in the Federal Ministry of Finance, Budget and National Planning, Basheer Abdulkadir, disclosed this during the opening event of a three-day workshop on the harmonisation of Nigeria’s VAT Act with ECOWAS directives. The event was organised by the ECOWAS Commission under the context of implementation of support Programme for Tax Transition in West Africa.

Abdulkadir who said that the low VAT performance is worrisome, noted that the country’s VAT rate was less than one per cent to the Gross Domestic Product.

He said;

“Our VAT performance or rate is still one of the lowest. Nigeria has a VAT of less than one per cent to the GDP and this is worrisome. Also, we have the lowest VAT within the sub-region with an average of 16 per cent, while VAT rate in Nigeria is 7.5 per cent. So we need a lot of policy changes on tax administration as we also need to come up with strategies to address some of these issues.

“Also, the exemptions of VAT in Nigeria is not aligned with those of ECOWAS and we know that these exemption are some of the issues to do with revenue mobilisation under the VAT. We need to align our exemptions with ECOWAS directive.”