Oil Shortfall: FG Resorts To VAT

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As Nigeria continues grapple with the challenges of shocks arising from over 50 per cent revenue loss due to falling oil prices, the coordinating minister for the economy and minister of finance Dr Ngozi Okonjo-Iweala, said there was the need for harmonisation of taxes in Nigeria to allow the country focus on VAT, adding that currently, there were too many levies and taxes and charges.

Okonjo-Iweala, who briefed journalists at the end after the just concluded International Monetary Fund/ World Bank 2015 spring meetings in Washington, D.C., also called for the speedy passage of the 2015 budget.

“We need to harmonise and streamline and do away with many of the existing fees and charges and focus on the main important taxes that will generate the kind of revenue that is needed and that is the VAT, the five per cent.

“If we double that, it will bring a lot of money for the states and in any case, the governors at the last meeting of the National Economic Council said this is what they recommended, so it is not even an issue of the federal government, the state governments want it because they know they will get 86 per cent of that,” she said.

Okonjo-Iweala, while summarising the events of the last three days stated that the spring meetings focused on two set of critical issues, the weak recovery in the global economy, and the issue of the falling commodities’ prices and the implications for emerging markets and low income countries who are dependent on them for revenue.

“The conclusion is that generally, falling commodities prices like falling oil prices can become beneficial to global growth and actually the World Bank is estimating one per cent growth in GDP for the world based on this because consumers and businesses benefit.

Source : Leadership

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