Tinubu’s Government expected to raise Value-Added-Tax (VAT) from 7.5% to 15%

Tinubu’s Government expected to raise Value-Added-Tax (VAT) from 7.5% to 15%.

The federal government is expected to raise the Value Added Tax (VAT) to 15 per cent from the current 7.5 per cent by 2027 to enable it fund its fiscal deficit and debt service obligations, including social and job creation projects. International business research firm, Economist Intelligence Unit (EIU), stated this in its Country Report.

EIU said the deficit could widen to five per cent of Gross Domestic Product (GDP) in 2024, slightly above the estimate for 2023. It said this was expected to average 4.5 per cent of GDP annually between 2025 and 2028 – more than the legal limit of three per cent of GDP and representing an unusually lax period of fiscal policy for the country.On the foreign exchange (FX) regime, EIU predicted the naira to weaken to N2, 381 to the dollar, stating that the spread with the parallel market will be five per cent to 15 per cent.