The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has disowned reports suggesting an increase in the Value-Added Tax rate from 7.5 per cent to 10 per cent.
Edun said the VAT rate remains unchanged at 7.5 per cent, as stipulated in the nation’s tax laws.
In a statement issued to newsmen on Monday, 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 stipulated.”
The Minister harped on the importance of maintaining a balanced tax system, saying that Nigeria’s tax framework is built on three key pillars- tax policy, tax laws, and tax administration.
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“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 said.
Addressing concerns over government actions perceived as burdensome, Edun reassured Nigerians that fiscal policies are designed to promote sustainable economic growth and alleviate poverty, not to hinder them.
“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 stated.
Responding to media reports that painted the government as seeking to impose additional hardship on citizens, Edun called the reports as inaccurate.
“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 stated.
He also highlighted recent government initiatives to ease the financial burden on citizens, particularly regarding food imports.
“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,” Edun noted.
For clarity, Edun reiterated that VAT remains at 7.5 per cent and will continue to be applied 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.