Nigeria: Increasing VAT Better Than Borrowing Abroad – Emefiele

CBN Governor, Mr. Godwin Emefiele.

SAN FRANCISCO, September 21, (THEWILL) – The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele says it makes more economic sense for the federal government to increase the Value Added Tax (VAT), which is currently at 5 per cent to 7.5 per cent than increasing the nation’s debts by borrowing amidst criticisms.

The CBN governor also assured Nigerians that the planned nationwide implementation of the cashless policy scheduled for next year would significantly benefit Nigerians in the long term.

Speaking at the end of the rescheduled two-day meeting of the Monetary Policy Committee (MPC) Friday, Emefiele said government’s current drive to increase VAT had the potential to improve fiscal revenue to support expenditure and reduce the budget deficit as well as government borrowing, when implemented.

The governor, who has received commendations for his aggressive push to turn Nigeria into a producing economy, said the government has a responsibility to provide infrastructure for its citizens.

“Government, unfortunately, has no option, if it does not borrow, it must raise revenue and you all agree with me that it has obligations to meet up with.

“The increase of VAT to 7.5 per cent is low compared to other countries, in fact, with this increase, Nigeria has the lowest in the world.

“If the government can meet its obligation through this increment, it should be supported,” he said.