The Minister of Finance, Wale Edun, has confirmed plans by the Federal Government to increase the Value Added Tax, VAT, rate.
Mr Edun disclosed this while speaking at an investor meeting during the ongoing IMF/World Bank Annual Meetings in Washington, DC.
Recall that in September, Chairman, Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, had said the committee was proposing a law to the National Assembly to increase valued added tax from the current 7.5% to 10%.
The bill was subsequently transmitted to the National Assembly for consideration by President Bola Tinubu.
According to Mr Edun, the proposed VAT increase, currently under consideration by the National Assembly, will be applied gradually and will primarily affect luxury items.
While explaining how the policy would work, Mr Edun emphasised that the hike will largely target luxury goods, adding that essential items consumed by poorer and vulnerable Nigerians would remain exempt from VAT or attract a zero rate.
He said the list of essential goods exempted from VAT will be made available to the public in due course.
He said: “In terms of VAT, President Bola Tinubu’s commitment is that while implementing difficult and wide-ranging but necessary reforms, the poorest and most vulnerable will be protected.
“So, the bills going through the National Assembly in terms of VAT will raise VAT for the wealthy on luxury goods, while at the same time exempting or applying a zero rate to essentials that the poor and average citizens purchase,” the minister was quoted as saying by the Daily Trust Newspaper.
