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Value-Added Tax (VAT) is a choice

By Nurudeen Adeyemi


Do you know that Nigeria has the lowest VAT rate in Africa?

The Sales Tax Rate in Nigeria stands at 5% while in South Africa stands at 15% and Ghana at 12% but in Eritrea stands at 5%.

Likewise, do you know that food item, medicals, and education do not attract VAT in Nigeria?, except if you choose to go to a restaurant to eat and drink or you go to a supermarket to buy food item then one can pay VAT. So, VAT basically is a consumption tax, likewise, if you choose to travel to Abuja or any state within Nigeria by air transportation, then one can pay VAT except that the government has removed VAT from domestic air transportation since 2018.

If the government increase VAT by 50%, then the sales tax rate in Nigeria will stand at 7.5% and it will still be the lowest VAT rate in Africa after Eritrea that stands at 5%. Moreover, those who choose not to go to the local markets to buy their food items and cook at home are the ones that would be subject to VAT.

If a low-income earner chooses to buy his groceries from Shoprite or Bestbuy Supermarket, then he will be subject to VAT, but if he chooses to cut his coat according to his size by buying from the open market, like Idumota market or Wuse market, then he wouldn’t be subject to VAT and he would save more money.

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