Nigerians have reacted angrily to a move by the government to increase Value Added Tax, or VAT, from 5% to 7.2%. The rise in VAT, which is the tax you have to pay when you buy goods or services, is expected to come into effect next year.
Many have taken to social media to vent their frustration. Some have said that, with the already difficult economic situation in the country, the tax increase will only make things worse. Nigeria is Africa’s top oil producer and one of the continent’s largest economies. But instability in global oil prices in recent years has left the government struggling to pay salaries and provide infrastructure.
The current VAT rate in Nigeria is said to be one of the lowest in the world. But the country has high rates of extreme poverty and unemployment. Small businesses are also struggling.
Many Nigerians say the tax increase is likely to put more pressure on low-income families, and businesses. Opposition politicians have also criticized the move, saying it will push up the cost of living. But the government says it is necessary to diversify its revenue sources away from oil, something which the economy has depended on for decades.
Nigeria’s finance minister said the tax boost will also help the country’s 36 states pay workers’ salaries. BBC
Pix: Nigerian market
