Nigeria Government plans VAT increase and wide ranging tax reforms

Nigeria's government is considering changes to the tax regime as part of efforts to overcome the crisis brought on by falling oil prices.Vice President Yemi Osinbajo said that the government is looking at increasing tax coverage. The government plans to increase value-added tax from 5 percent, which is among the world's lowest VAT rates, and broadening the tax base. Osinbajo said that at present they were only collecting just about 20 percent of the potential tax. The sharp drop in crude revenues, which provide 95 percent of foreign earnings, has led to the naira hitting record lows on the parallel market as foreign exchange reserves dwindle. Finance Minister Kemi Adeosun last week announced plans to borrow up to $5 billion from multiple sources, including the Eurobond market, to plug its budget deficit