Sales Tax Articles
Sales Tax State Activity Update - July 2007
Nigerian VAT Rates Trapped in Political Power Play
Effective May 23, 2007 the standard rate of VAT was increased from 5% to 10%. The increase was met with widespread resistance with civil and labor groups calling for a nationwide strike. In response, newspapers reported that the Secretary to the federal government announced that the VAT increase has been suspended (not reversed).
Why is there still confusion? Because the new government has yet to appoint a Minister of Finance who is the only person with the authority to suspend the VAT increase. Therefore, the announcement by the secretary carries no legal weight. No one knows for sure what action the Minister of Finance, once appointed, will take.
What should businesses do in the meantime? Without a clear path to follow it's really up to each business to decide what approach they want to take during this period of uncertainty.
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