http://thenerveafrica.com/2559/imf-chief-calls-on-nigeria-to-raise-vat-as-budget-under-strain/

Nigerian authorities should consider raising value-added taxes and removing fuel subsidies to boost revenue and compensate for a plunge in oil prices, the International Monetary Fund Managing Director Christine Lagarde said.

“Hard decisions will need to be taken on revenue, expenditure, debt, and investment going forward,” she said in a speech to lawmakers in the capital, Abuja, on Wednesday. The government must “act with resolve by stepping up revenue mobilization,” she said, including possibly raising the VAT rate from the current level of 5 percent, which is among the lowest in the world.

The slide in oil prices means the government of Africa’s largest crude producer needs a “fundamental change” in which it operates and can’t rely on its oil wealth to deliver services to the people, she said. President Muhammadu Buhari’s administration will need to focus on managing debt, curbing recurrent costs and eliminating fuel subsidies, she said.

flamingtiger:

http://thenerveafrica.com/2559/imf-chief-calls-on-nigeria-to-raise-vat-as-budget-under-strain/

Nigerian authorities should consider raising value-added taxes and removing fuel subsidies to boost revenue and compensate for a plunge in oil prices, the International Monetary Fund Managing Director Christine Lagarde said.

“Hard decisions will need to be taken on revenue, expenditure, debt, and investment going forward,” she said in a speech to lawmakers in the capital, Abuja, on Wednesday. The government must “act with resolve by stepping up revenue mobilization,” she said, including possibly raising the VAT rate from the current level of 5 percent, which is among the lowest in the world.

The slide in oil prices means the government of Africa’s largest crude producer needs a “fundamental change” in which it operates and can’t rely on its oil wealth to deliver services to the people, she said. President Muhammadu Buhari’s administration will need to focus on managing debt, curbing recurrent costs and eliminating fuel subsidies, she said.

This advise to raise VAT shouldn't be heeded to. The government recently hasn't been meeting up its salary obligations as when due which has affected spending in general . Even Fast Moving Consumer Goods is not exempted -- there's dwindling spending amongst consumers-- this is a catalyst for recession.
Now, she's saying that VAT should be increased in an economy that is gradually slipping to recession. Will this encourage spending?
We all understand that the Government intends making Tax the "new Oil", however increasing tax rates or imposing new ones isn't the way to go at the moment( Nigerians are finding things really hard) the government (Federal and State) should rather, widen its tax net and work on Tax Administration in general, Nigeria currently ranks 181/189 Economies for Ease of Paying Tax-- this is bad for a country that wish to heavily rely on tax to fund its budget.