A former aide to an ex-head of state and two presidents, Professor Ode Ojowu has called on Bola Tinubu to reduce Nigeria’s Value Added Tax to 5 per cent.
Ojowu in an interview with Daily Trust said VAT was introduced before the regime of the late Sani Abacha who first implemented it.
According to the financial expert, the World Bank had at the time advised that VAT be placed at 17.5 per cent but the Abacha regime rejected that even though the global bank had argued that 5 per cent rate was too small to even cover the cost of collection.
He said, “Ghana took 17.5 per cent as advised by the World Bank, but we took 5 per cent. When Ghana implemented their 17.5 per cent, they harvested riots. There was riot everywhere until the government of that country was forced to suspend it in 1995 and reintroduced it at 10 per cent in 1998.
“In Nigeria, when it was 5 per cent, the revenue projected for that year was N6, billion, but we got N8.15 billion. And the second year, it was projected to be N12 billion in 1995, but we got N21 billion,” Ojowu said.
Further speaking on the economic situation of the country, Ojowu said as expected, Nigerians would not be interested in anything that has to do with the upward review of tax in the country.
He said, If I were Tinubu, I would just give an order that while this debate is on, I want to reduce VAT back to 5 per cent. I think that in the last third quarter of 2024, they got N1.73 trillion. If I were to play politics with it, I would say “let us.”
Nothing that the president cannot change the law, Ojowu said aspects of the law can be suspended in consideration of the situation on the ground.
He said, “However it works, there would have been an amount of encouragement, and confidence and hope (that) would be more than the loss of revenue arising from the 2 per cent.
“In the situation that we are in now, the last thing you want to be talking about are taxes. Once people hear the word “tax”, it irritates them, whether they are paying or not,” he noted.
