Vice-President Yemi Osinbajo says Nigeria’s current Value Added Tax (VAT) rate is the lowest in Africa.
The vice-president stated this in Lafia, the Nasarawa State capital, Monday at the National Micro, Small and Medium Enterprises Clinics for Viable Enterprises.
According to Osinbajo, “Many people have said this is a higher tax rate for consumers and has complications on those who are trading as well. You must remember that this is the lowest VAT rate in the whole of Africa.
“Why it is true is that Ghana has reduced its VAT rate from 15 per cent to 12.5 per cent. Ours is 7.5 per cent.”
He went further to mention that small and medium companies with a turnover of less than N25 million do not have to register for VAT.
“So that way, the government is not creating any extra burden for the small and medium companies. In addition to reduce the impact of VAT on consumers, several basic items such as food, drugs and educational items. So there is no payment of VAT on food, drugs and educational items,” he said.
The vice-president stated that there was another upside increase in the VAT as additional revenues would now go to the states to be able to pay the new minimum wage.
He said: “There is another upside increase in the VAT. This is additional revenue will now go to the states from VAT. The states can now be able to earn additional revenues so that they can do additional things, at least to begin to pay the new minimum wage. This way, it will improve consumers spending as well.
“I think despite the increase in VAT, there are so many inbuilt advantages that are for the small businesses to thrive. On our part at the federal level, we are hoping on the establishment of shared facilities across the country.”
Osinbajo expressed confidence in the economic transformation programme of the Governor Abdullahi Sule-led administration, hence he charged the small businesses in the state to take advantage of the opportunity offered by the Nasarawa State government.
In a remark, Governor Sule said that Nasarawa State has keyed into the federal government’s initiative of Economic Recovery and Growth Plan (ERGP).
He said: “It is for this reason that we developed the Nasarawa Economic Development Strategy (NEDS) and continued to initiate policies and programmes geared towards the creation of conducive business environment for business to strive, poverty reduction, as well as job creation in the state.
“In this regard, we constituted the Nasarawa State Enabling Business Environment Council (NEBEC) in line with the federal government framework to drive reforms on ease of doing business.”
In his determination to support the micro, small and medium enterprises and to make Nasarawa State the best destination for business, the governor stated that the state government has commenced the conceptualization of an industrial cluster within the Abuja-Nasarawa corridors for small industries to thrive and serve as a major hub for small industries with seamless start-up businesses.