The federal government plans to double its value-added tax (VAT) and cancel government projects if oil prices continue to slide.
Coordinating Minister for the Economy/Minister of Finance, Dr. Ngozi Okonjo-Iweala said this in an interview with The Wall Street Journal. According to OKonjo-Iweala, the country is reviewing some 6,000 ongoing projects to see which will be kept, delayed, or scrapped.
“It will be a huge exercise,” she said. If oil prices continue to sink, it will also raise its value-added tax, which at five per cent to 10 per cent she said.
Nigeria faces a test of whether or not it can raise revenue and cut spending as quickly as oil prices are tumbling. The collapse in global crude rates has arrived at a particularly inopportune moment for Africa’s largest economy and country by population. The government earns about 80 per cent of its income from petroleum exports.
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