Taiwo Oyedele, Chairman Presidential Fiscal Policy and Tax Reforms Committee, has said the committee working on increasing the Valued Added Tax (VAT) from the current 7.5% to 10%.

Oyedele announced this during an interview on Channels TV’s Politics Today.

According to Oyedele, the tax law the committee drafted would be submitted to the National Assembly for approval.

He also said his committee was working to consolidate multiple taxes in Nigeria to ensure tax reduction.

He said, “We have significant issues in our tax revenue. We have issues of revenue generally which means tax and non-tax. You can describe the whole fiscal system in a state that is in crisis.

“When my committee was set up, we had three broad mandates. The first one was to look at governance: our finances as a country, borrowing, coordination within the federal government and across sub-national.

“The second one was revenue transformation. The revenue profile of the country is abysmally low. If you dedicate our whole revenue to fixing roads it will be insufficient. The third is on government assets.

“The law we are proposing to the National Assembly has the rate of 7.5% moving to 10% from 2025. We don’t know how soon they will be able to pass the law. Then subsequent increases are also indicated in terms of the year they will kick in.

“While we are doing that, we have a corresponding reduction in personal income tax. Anybody that is earning about N1.5 million a month or less, they will see their personal income tax come down. Companies will have income tax rate come down by 30% over the next two years to 25%. That is a significant reduction.

“Other taxes they pay are quite many: IT levy, education tax, etc. All these we are consolidating into a single one. They will pay 4% initially. That will go down to 2& in the next few years.”

The Nigerian economy grew in the second quarter of 2024 by 3.19% year-on-year, according to data released by the National Bureau of Statistics (NBS) on Monday.

This is an improvement from the 2.98% growth recorded in the first quarter of 2024 and the 2.51% achieved during the same period in 2023.

The growth was driven predominantly by the service sector, which saw a 3.79% growth during the quarter and contributed 58.76% to Nigeria’s aggregate GDP.

The service sector, which includes industries such as telecommunications, banking, and hospitality, has become a significant driver of economic activity in Africa’s largest economy as it diversifies away from its traditional reliance on oil and agriculture.

In addition to the strength of the service sector, the industry sector also posted a positive performance, growing by 3.53% during the quarter.

This is a notable recovery from the -1.94% decline recorded in the same period in 2023.

The industry sector includes manufacturing, construction, and utilities, which have benefitted from increased investments and improvements in energy supply.

The agriculture sector, a longstanding pillar of the Nigerian economy, experienced a modest growth of 1.41%, slightly lower than the 1.50% recorded in the second quarter of 2023.

Despite the slower growth, agriculture remains vital to Nigeria’s economy, providing employment to millions of Nigerians and contributing to food security.

The overall 3.19% growth in GDP highlights the resilience of the Nigerian economy despite ongoing challenges such as inflation, currency depreciation, and insecurity.

Analysts had predicted a modest growth rate of around 3.16% for the second quarter, closely aligning with the actual performance.

The Financial Derivatives Company (FDC) also forecasted Nigeria’s annual average GDP growth to reach approximately 3.07% in 2024, which is consistent with the International Monetary Fund’s (IMF) revised projections.

The Q2 GDP performance supports these forecasts, providing cautious optimism for the remainder of the year.

While the growth of the Nigerian economy is a positive development, challenges remain. Inflation, particularly in food prices, continues to strain household incomes, and the naira’s depreciation has increased the cost of imports.

Also, infrastructure deficits and insecurity in various regions of the country pose obstacles to sustained economic expansion.

Despite these challenges, the continued growth in the service and industry sectors demonstrates Nigeria’s capacity to adapt and evolve in an increasingly diversified economy. If these sectors maintain their current trajectory, they could help mitigate some of the pressures facing the economy and improve living standards for Nigerians.

The government’s focus on economic reforms, including efforts to attract foreign investment, improve infrastructure, and enhance security, will be crucial in sustaining and building on the positive GDP growth in the coming quarters.

Economic diversification remains a key goal, and the strong performance of the service sector is a promising sign that Nigeria is moving in the right direction.

With cautious optimism, experts are hopeful that Nigeria can leverage its expanding sectors to achieve sustained economic growth and create more opportunities for its growing population.

Ngozi Okonjo-Iweala, Director General of the World Trade Organization (WTO), has raised concerns about the country’s declining GDP growth.

Speaking at the annual General Conference of the Nigerian Bar Association (NBA) on Sunday, Okonjo-Iweala highlighted a troubling trend that has marked the Nigerian economy since 2014.

Addressing an audience of legal professionals, policymakers, and economists, Okonjo-Iweala painted a grim picture of Nigeria’s economic performance, noting that the nation’s GDP growth rate has significantly deteriorated over the past decade.

She observed that between 2000 and 2014, Nigeria enjoyed a relatively robust average GDP growth rate of 3.8%, which notably outpaced the population growth rate of 2.6% annually.

This period was characterized by substantial economic advancements and improvements in living standards for many Nigerians.

However, the post-2014 era has been marked by economic stagnation and decline. According to Okonjo-Iweala, Nigeria’s GDP growth rate has turned negative, recording a troubling average decline of 0.9%.

This reversal, she argues, reflects the government’s failure to sustain the positive economic momentum achieved by previous administrations.

“The contrast between the two decades is striking,” Okonjo-Iweala said. “While the early 2000s brought significant economic progress, the subsequent years have seen a marked decline in GDP growth, which has directly impacted the average Nigerian’s quality of life.”

The WTO Director General attributed this decline to a combination of factors, including inconsistent economic policies, lack of effective reform implementation, and broader macroeconomic challenges.

She said despite various reform attempts and temporary economic improvements, Nigeria has struggled to build on and consolidate these gains.

“The inability to sustain economic growth has had severe repercussions,” Okonjo-Iweala continued. “Many Nigerians are facing diminished job prospects and reduced well-being, as the benefits of earlier growth have not been maintained or built upon.”

In her address, Okonjo-Iweala urged for urgent and comprehensive economic reforms to address these challenges.

She called on Nigerian policymakers to focus on strategies that promote sustainable growth, enhance economic stability, and improve the overall quality of life for the populace.

The call for action comes at a time when Nigeria is grappling with various economic pressures, including inflation, currency depreciation, and unemployment.

Okonjo-Iweala’s remarks underscore the need for renewed efforts to stabilize the economy and implement policies that can drive long-term growth and development.