Did the New FIRS Chairman just confirm government’s intent to increase VAT to 10% after elections?

“Our VAT is the lowest in the sub-region, if not in Africa. If the need arises that we must increase VAT, we will. Nigeria’s VAT (five per cent) is the lowest because in some African countries, the rate is as higher as 20 per cent, 25 per cent and 27 per cent. In Ghana, VAT is 15 per cent,

“The proposal to increase VAT to 10 per cent has been pending since 2007. We wanted to increase it in 2011 but political exigency, especially electioneering, did not make it possible.

“We went to Council of State and proposed that we can increase VAT to 10 per cent and repeal education levy being given to Tertiary Education Trust Fund (TETFUND).”

“If the VAT is increased to 10 per cent, five per cent will still be available for sharing. We will repeal Education levy and out of the remaining five per cent, two per cent will go to TETFUND, 2.5 per cent to security and 0.5 per cent to NITDA for technology development.

“We will engage the media, the labour, the academia, the Manufacturers Association of Nigeria (MAN) and other stakeholders before we raise VAT to 10 per cent.”

Considering the fiscal crisis that is likely to unfold after the election (regardless of who wins) this statement from the FIRS chairman suggest plans have already been worked out and awaiting roll out once the election fever is over. The fact that they want to eliminate education levy and introduce more beneficiaries to the VAT pool suggest this is an attempt to generate more in indirect taxes.