Nigerians express concern over VAT pressure amid rising cost of living

Consumers, traders, and small business owners report that the increasing cost of goods and services makes it difficult to cover daily expenses. VAT is a consumption tax ultimately paid by consumers through product prices, even though businesses collect and remit it. Traders in Lagos and other urban centers have increased prices due to higher operating and restocking costs.

Aisha Bello, a provisions trader, noted frequent price increases when restocking. Financial analyst Abayomi Tairu explained that VAT disproportionately affects low-income households, as they spend a larger portion of their income on basic necessities, highlighting the importance of exemptions on essential goods. While Nigeria exempts some essential goods and services, consumers like civil servant Chinedu Okafor feel these measures have not shielded them from inflation and rising living costs.

The situation is altering consumer behavior, with many households reducing spending, buying smaller quantities, and opting for cheaper alternatives. Retailers, including supermarket owner Elias Ifeanyi, are also experiencing declining consumer demand. Tairu warned that over-reliance on consumption taxes could weaken consumer demand and impact economic growth.

He recommended targeted reforms, such as expanding VAT exemptions for essential items, strengthening social