Professor Ode Ojowu, a former aide to an ex-head of state and two former Nigerian presidents, has called on President Bola Tinubu to reduce Nigeria’s Value Added Tax (VAT) to 5%.

In an interview with Daily Trust, Ojowu, a financial expert, discussed the history of VAT in Nigeria, recalling its introduction during the regime of the late General Sani Abacha. While the World Bank recommended a 17.5% VAT rate, the Abacha administration set it at 5%, a decision Ojowu believes worked well for Nigeria at the time. He pointed to Ghana’s experience with the World Bank’s recommended 17.5% rate, which led to public unrest and a subsequent suspension in 1995.

“Ghana took 17.5% as advised by the World Bank, but we took 5%. When Ghana implemented their 17.5%, riots broke out everywhere, and the government had to suspend it,” Ojowu said.

He praised Nigeria’s early success with the 5% VAT, noting that revenue exceeded projections. In 1994, Nigeria collected N8.15 billion against a projected N6 billion, and in 1995, the country surpassed a projected N12 billion by collecting N21 billion.

Ojowu cautioned against further tax hikes in Nigeria’s current economic climate, warning that the public would resist such measures. He suggested that President Tinubu reduce VAT back to 5% to boost public confidence and alleviate growing frustrations.

“If I were Tinubu, I would just give an order that while this debate is on, I want to reduce VAT back to 5%,” Ojowu stated, emphasizing that the potential revenue loss from a 2% reduction could be outweighed by the positive impact on public morale.

While acknowledging that the president cannot unilaterally alter the law, Ojowu pointed out that provisions might exist to temporarily suspend certain aspects of it given the nation’s current economic challenges.