Nigeria depends on crude exports for about 70 per cent of
government revenue and more than 90 percent of foreign exchange.
The price of
Brent crude has dropped by more than half since peaking in June last year,
undermining President Muhammadu Buhari’s ability to deliver on his election
promises since he took office in May.
Nigeria plans to double the value-added tax rate to 10 per
cent this year to help shore up government revenue eroded by the declining
price of oil, the country’s main export, the Federal Inland Revenue Service
said.
“The plan is to increase to 10 percent this year, but we
have to consult first with relevant stakeholders,” Sunday Ogungbesan, Acting
Executive Chairman of the FIRS, told reporters.
FIRS will put more effort in meeting targets after its
collection of 1.97 trillion naira ($9.9 billion) in revenue in the first half
fell short of a goal of 2.29 trillion naira, Ogungbesan said.
“If we achieve our revenue targets, to a great extent
government deficits will be reduced,” he said. “Our plan is to bring every
business into the tax net, this economy can survive outside oil,” he noted.
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