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As the National Assembly considers the proposed tax reform Bills, a financial expert, and former vice presidential candidate on the opposition Action Democratic Party (ADP), Dr. Okey Udo, said that the extant 7.5% value-added tax (VAT) rate is grossly inadequate.

Speaking during the presentation and launch of three inspiring books entitled- Tax Tithe in Tight Economy; Optimizing VAT for Business Growth and Economic Development; Murky Waters of Politics in Abuja at the weekend, he applauded President Bola Ahmed Tinubu for initiating the tax reforms bills.

Udo, a chartered accountant, and ADP’s national treasurer, insisted that the 7.5 % VAT rate is far lower than what is obtainable in other countries.

Acknowledging concerns over corrupt practices and poor management of the usage of VAT proceeds in the country, he said the increase in the 7.5 % VAT is in Nigeria’s interest with an emphasis on taxing the rich to cater to the basic needs of the poor in the country.
“It would interest you to know that, yes, I fully support the President on the tax reform Bills,” he said.
“It’s not for his own benefit. It will outlive him. But as a matter of fact, we are talking about the issue of VAT being 7.5%, while we are trying to do business with people that are charging VAT at 15% rate. It does not tally well.

“Nigeria collects one of the smallest VAT across the world. even when VAT is the major source of revenue in many countries. Even in countries like France, it’s about 50%. Across the whole world, it’s about 35% while Nigeria is just about 7.5%. So we are still lagging behind. Yes there is need for an increase in VAT.

“But we know the fear of the people is that the money that is being garnered, it has not been well managed. That’s just the issue. But if we contribute adequately, and it should be progressive in nature in the situation where the rich pay more, in such a manner that the rich should be made to contribute to the welfare of the nation.

“If we can adopt this, the more VAT they charge and there’s good and sound fiscal management and policies, there’s no limitation tj what we can achieve in the country.”

Udo argued that with the vast resources spread across the country, Nigeria has the potential not just to be a giant of Africa but a giant of the world.

Nevertheless, he said a lot depends on the resolve of the citizenry to not only participate in the electioneering process notwithstanding the notions that their votes would not count at the end of the day.

He added: “As long as we live on this earth, there will always be a capture, recapture, uncapture of the state. The bad people will always come. They may, as a matter of fact, reign for a moment. But on the long run, they will lose. The devil will not prevail all the time. Even the forces of the earth will fight against them.

“So I strongly believe, whatever may be the issue, it can even start in 2027, people will come out. Like people wanted to change the scenario in 2027. After that experience, they said they have learned their mistakes. Things can change in 2027. So let nobody feel relaxed. Let them not think that if they try it again, they will fall.”