The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has dismissed reports suggesting a proposed increase in the Value-Added Tax rate from 7.5% to 10%.
In a recent statement issued on Monday, Edun emphasized that the VAT rate remains at 7.5%, consistent with Nigeria’s existing tax regulations.
Edun highlighted that “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.”
He stressed the importance of a well-functioning tax system, which relies on three foundational elements: tax policy, tax laws, and tax administration.
“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,” Edun stated.
In addressing concerns about potential economic burdens, Edun reassured the public that the government’s fiscal policies are crafted to support sustainable growth and alleviate poverty, not to impose undue hardship.
“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,” he asserted.
Edun also responded to media reports suggesting that the government intended to increase VAT and impose additional difficulties on citizens. He characterized these reports as misleading.
“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,” he explained.
Additionally, Edun pointed out recent government actions aimed at easing financial pressures on citizens, such as eliminating import duties, tariffs, and taxes on essential food items like rice, wheat, and beans.
“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,” he noted.
To reiterate, Edun confirmed that the VAT rate remains at 7.5% and will continue to apply to all VAT-eligible goods and services.
“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,” he concluded.
