September 09, (THEWILL) – The Federal Government says the rate for Value-Added Tax (VAT) as contained in relevant tax laws and chargeable on goods and services has not been adjusted to 10% and remains at 7.5%.
This is coming amid disclosure by Taiwo Oyedele, Chairman, Presidential Fiscal Policy and Tax Reforms Committee, who said the committee is proposing a law to the National Assembly to increase valued added tax from the current 7.5% to 10%.
Speaking during an interview on Channels TV’s Politics Today, Oyedele said, “The revenue profile of the country is abysmally low. If you dedicate our whole revenue to fixing roads it will be insufficient. The third is on government assets. The law we are proposing to the National Assembly has the rate of 7.5% moving to 10% in 2025. We don’t know how soon they will be able to pass the law. Then subsequent increases are also indicated in terms of the year they will kick in.”
On Sunday, former Vice-President, Atiku Abubakar, warned against any further hike in VAT, saying the move can become a “blazing inferno that will consume the very essence of our people.”
Speaking in a statement he personally signed on Monday, Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said: “The current VAT rate is 7.5% and this is what the government is charging on a spectrum of goods and services to which the tax is applicable. Therefore, neither the Federal Government nor any of its agencies will act contrary to what our laws stipulate.
“The tax system stands on a tripod, namely tax policy, tax laws and tax administration. All three must combine well to give us a sound system that gives vitality to the fiscal position of the government.
“Our focus as a government is to use fiscal policy in a manner that promotes and enhances strong and sustainable economic growth, reduces poverty, as well as makes businesses flourish.
“The imputation in some media reports on the issue of VAT and the opinion articles that have sprouted from them seem to wrongly convey the impression that the government is out to make life difficult for Nigerians. That is not correct. If anything, the Federal Government has, through its policies, demonstrated that it is committed to creating a congenial environment for businesses to thrive.
“In fact, it is on record that the Federal Government, as part of efforts to bring relief to Nigerians and businesses, recently ordered the stoppage of import duties, tariffs and taxes on rice, wheat, beans and other food items.
“For emphasis, as of today, VAT remains 7.5% and that is what will be charged on all the goods and services that are VAT-able.”
