FACT-CHECK: Nigeria’s Finance Minister Lied In Claiming Country’s VAT Rate Lowest In The World

In Breaking News, Business & Economy, Fact-Check

By Ogar Monday

Claim: Nigeria’s Minister of Finance, Zainab Ahmed, recently claimed that the country’s 7.5% VAT rate is the lowest in the world.

Verdict: False. At least three other countries have a lower VAT rate than Nigeria. 

Full Text

As Nigeria struggles with a rising cost of governance and depleting revenue, the government continues to look for avenues to raise money. One such way is through Value Added Tax (VAT). 

Recently, the country’s Minister of Finance, Hajia Zainab Ahmed, while paying a courtesy call on Nigeria’s international broadcasting station, Voice of Nigeria, argued that Nigeria should raise more revenue from VAT, by increasing the rate from 7.5% to 10%.

To justify her stance, the minister stated that “VAT was one of the ways to increase revenue, and we still have to increase VAT because, at 7.5 percent, Nigeria has the lowest VAT rate in the world, not in Africa, in the world.”

What Is VAT? 

VAT is a consumption tax added to the price of goods and services and paid when a good is purchased, or a service is rendered. The cost is carried by the consumer.

Introduced in 1993 to replace the sales tax in Nigeria, VAT continues to take more space in its contribution to Nigeria’s revenue, reaching a whopping N1.2 trillion Naira in the first six months of 2022. 

VAT is a major source of revenue for governments worldwide and requires businesses to keep detailed records of their sales and purchases.

The Minister’s position as a high-ranking government official, and with powers to make decisions with far-reaching consequences, informs CrossRiverWatch’s fact-check.

Verification

To verify the minister’s claim, CrossRiverWatch first looked through “tax summaries,” an online tax portal run by one of the world’s leading financial consultancy companies, PricewaterhouseCoopers, PWC. The website holds an overview of up-to-date statutory VAT rates across different countries.

At least three countries –Thailand, United Arab Emirates, and Oman– on the portal have VAT rates lower than the 7.5% of Nigeria as of 2023.

To confirm that the information on the portal is accurate, CrossRiverWatch dug deeper into state-owned websites. On the website of Thailand’s revenue department, the VAT rate for the country is listed as 7%. Also, information on the website of the UAE’s Ministry of Finance says VAT, which was introduced in the country in 2018, is charged at the rate of  5%. In addition, chapter 5, article 36 of Oman’s VAT law, available on the Tax Authority website, fixes the country’s VAT at 5%, lower than Nigeria’s 7.5% VAT rate. 

Conclusion

Findings by DUBAWA and as available on the websites of three other countries show that Oman (5%), Thailand (7%), and the UAE (5%) have VAT rates lower than Nigeria’s 7.5% charge.

The researcher produced this fact-check per the DUBAWA 2023 Kwame KariKari Fellowship, in partnership with CrossRiverWatch, to facilitate the ethos of “truth” in journalism and enhance media literacy in the country.

You may also read!

Nine Inaugurated To Drive Cross River Economic Management Team

By Sylvia Akpan, Government House Correspondent  Cross River State Governor, Sen. Bassey Otu, has inaugurated a nine-member Economic Management

Read More...

Ayade’s Father In-Law, Pa Akpo Begins Final Journey Home

Ayade's Father In-Law, Pa Akpo Begins Final Journey Home "A historian and educationist, Pa Akpo was a devout Catholic and

Read More...
Sports Development Minister, Senator John Owan Enoh (M) and partners of the ministry at an event in Lagos where three Memoranda of Understanding on sports development and funding were signed with three different partners. 19/4/2024 (Credit: FMSD/Diana-Mary Nsan)

FG Signs Three MoUs On Sports Development And Funding

He expressed hope that with the three groundbreaking agreements, Nigerian sports is at the cusp of phenomenal development that

Read More...

One commentOn FACT-CHECK: Nigeria’s Finance Minister Lied In Claiming Country’s VAT Rate Lowest In The World

Leave a reply:

Your email address will not be published.

Mobile Sliding Menu

Share this now