The Finance Minister, Wale Edun, has denied rumours that the Value-Added Tax (VAT) rate in Nigeria will increase from 7.5% to 10%.
On Monday, Edun confirmed that the VAT rate remains at 7.5%, as stated in Nigeria’s tax laws.
“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,” Edun said.
He explained that Nigeria’s tax system is based on three main parts: tax policy, tax law, and tax administration, stressing that these three must work together for a strong and effective tax system.
“The tax system stands on a tripod, namely tax policy, tax laws, and tax administration. All the three must combine well to give us a sound system that gives vitality to the fiscal position of the government,” the minister added.
Edun addressed public concerns, reassuring that the government’s financial policies aim to boost growth and reduce poverty, not cause hardship, stating, “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.”
Responding to media reports that claimed the government is causing difficulties for citizens, Edun denied such claims and highlighted recent actions to ease financial pressure on Nigerians, including the removal of import duties on important food items like rice, wheat, and beans.
“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,” Edun noted.
He reiterated that the VAT rate will continue to be 7.5% on all eligible goods and services.
Concluding, he stated that “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.”
