Sub-Saharan Africa
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Nigeria's Tax Reform Set to Tackle Inflation, Official Says

The inflation rate in Nigeria reached the highest values in Africa at 34.8% in December last year, with the country ranking fourth in the world in this indicator.
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Presidential advisor Taiwo Oyedele defended Nigeria's tax reforms, aimed at curbing inflation by lowering costs. Following petrol subsidy removal and currency devaluation, President Bola Tinubu shifted focus to tax reform, targeting 15% inflation this year. Key reforms include a gradual value-added tax (VAT) increase to 12.5% by 2026, improved tax collection, and federal-state revenue sharing changes.
VAT exemptions are proposed for food, medicine, and essentials (82% of spending) to lower citizen costs. Despite a possible 18% price increase on other goods, VAT revenue is projected to decline by 30-40%. The overhaul seeks better compliance, global alignment, and addresses Nigeria's low tax-to-GDP ratio.
Sub-Saharan Africa
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The VAT changes face criticism, with concerns about stifling consumption, similar to the 2019 hike. A major issue is the proposal to allocate 60% of VAT to states where it’s collected, up from 20%, which northern governors oppose, citing regional inequality concerns.
The federal government is considering a counter-proposal from the governors, capping revenue-generating states' VAT share at 30%.