The ongoing controversy between the Federal Inland Revenue Service (FIRS) and some state governments over the appropriate authority in charge of the Value Added Tax (VAT) has created uncertainty which could repel potential investors.
This observation was made during the course of the week by some analysts.
In her opinion, Patricia Williams, a partner at Bowmans, a South African law firm in a presentation at a webinar organised by the Nigerian-British Chamber of Commerce (NBCC) last Thursday, said the controversy could further constrain Nigeria’s ability to attract new investments.
Williams added that this controversy could be bad for investments, as a perceived internal dispute among different government tiers over the ability to impose taxes could create more uncertainty.
In the same vein, a senior research analyst at Cordros Securities, Gbolahan Ologunro added in a telephone interview that these uncertainties erupting will lead to more hindrances in the free flow of investment into the country. 
Nigeria which is Africa’s biggest economy has struggled to attract sufficient foreign investments since 2015, relinquishing the spot as one of the continent’s top investment destinations to peers with far lower market sizes.
According to the National Bureau of Statistics (NBS), the total amount of foreign investment pumped into Nigeria slumped to the lowest level in four years in the first six months of 2021. It recorded a 61 percent decline, with the amount invested dropping from $7.15 billion to $2.78 billion invested in the same period of last year.
This VAT war has left businesses confused over how to pay the VAT and to whom.