Former Vice President Atiku Abubakar has sharply criticized the federal government’s proposed increase of the Value Added Tax (VAT) rate from 7.5% to 10%, warning that the move will exacerbate Nigeria’s already dire economic situation.
In a post on his official X (formerly Twitter) account on Sunday, Atiku expressed concerns that the proposed tax hike, along with other recent government policies, will deepen the cost-of-living crisis, hurt businesses, and disproportionately impact the poor.
Atiku described the VAT increase as a “blazing inferno” that could further destabilize Nigeria’s fragile economy.
The proposal, which comes at a time when the Nigerian National Petroleum Corporation Limited (NNPCL) has already announced higher pump prices for petrol, has drawn widespread criticism from economic analysts and the general public.
“The increase in VAT is set to become the blazing inferno that will consume the very essence of our people.
“President Bola Tinubu, alongside his coterie of advisers, has resolved to raise the VAT rate from 7.5% to 10%, even as the NNPCL has announced a soaring PMS price increase at the pump. This move unveils a new era of regressive and punitive policies, and its impact is destined to deepen the domestic cost-of-living crisis and exacerbate Nigeria’s already fragile economic growth,”Atiku stated in his post.
He emphasized that the VAT increase would impose further hardship on Nigerians, particularly the most vulnerable, at a time when inflation and unemployment rates are skyrocketing, while also accusing current Tinubu-led administration of being “profoundly insensitive” to the plight of ordinary Nigerians by indulging in unnecessary luxury spending.
More insight
In addition to the VAT hike, Atiku criticized a recent government policy allowing duty-free importation of agricultural commodities such as wheat, maize, and paddy.
He argued that this policy, introduced in August 2024, would severely undermine local farmers, who are unable to compete with low-cost imports from Asia, Europe, and America.
“This poses a grave threat to Nigeria’s food security ambitions, as local farmers, facing unfair competition, are compelled to reduce or entirely abandon their production efforts,” he added.
Atiku urged the Tinubu administration to rethink its economic strategies, cautioning that the VAT hike and other regressive measures would only fuel further unrest in the country.
What you should know
The federal government’s ongoing tax reform initiative was launched following the establishment of a tax and fiscal policy committee by President Bola Tinubu in August 2023.
The committee is headed by renowned tax master, Taiwo Oyedele.
It is tasked with creating a new tax framework to drive economic growth and development across the country.
As part of its mandate, the committee has proposed various reforms, including an increase in Value Added Tax (VAT) and the introduction of tax exemptions for low-income earners, among other measures.