IMF wants Nigeria to increase VAT, excise rates

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The Executive Board of the International Monetary Fund (IMF) has concluded assessment on Nigeria in 2017 and urged the Federal Government to consider increase in Value Added Tax (VAT) and Excise rates to boost revenue base.

Executive Board Assessment popularly known as 2017 Article IV Consultation with Nigeria said priority should be given to increasing non-oil revenue, including strengthening compliance, and closing loopholes and exemptions.

Executive Directors recognized that the Nigerian economy has been negatively impacted by low oil prices and production. Directors commended the efforts already made by the authorities to reduce vulnerabilities and enhance resilience, including by increasing fuel prices, raising the monetary policy rate, and allowing the exchange rate to depreciate.

However, they harped on stronger macroeconomic policies to rebuild confidence and foster economic recovery.

Directors welcomed the authorities’ Economic Recovery and Growth Plan (ERGP), which focuses on economic diversification driven by the private sector, and government initiatives to strengthen infrastructure-including the recently adopted power sector recovery plan. However, they underlined that without stronger policies these objectives may not be achieved.

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