No Cause For Alarm, VAT Stays At 7.5% — Edun
Assures FG will break no laws
BY OUR CORRESPONDENT – Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, says there is no cause for alarm as the Federal Government does not have plans to hike the Value-Added Tax (VAT) from the current 7.5 percent.
He said contrary to reports in the media space, the VAT rate has not been adjusted upward to 10 percent as being speculated in some circles, especially among the opposition.
The Minister, who affirmed that relevant tax laws and tariffs chargeable on goods and services make it legally expedient for VAT to stay at 7.5 percent, said; “The current VAT rate is 7.5 percent and this is what the government charges 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 the 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.”
Offering further explanations on the VAT controversy, Mr Edun said; “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.”
According to him; “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”.
The Minister’s rebuttal comes on the heels on attacks from some prominent Nigerians, including the former Vice President Atiku Abubakar who condemned purported plans by the government to increase VAT.
The Peoples Democratic Party (PDP) in the 2023 presidential election said in a statement on Sunday via his X handle that such policy would deepen the domestic cost-of-living crisis.
Further describing the plan as a “blazing inferno that will consume the very essence of our people”, Atiku said; “President Bola Tinubu, alongside his coterie of advisers, has resolved to raise the VAT rate from 7.5 percent to 10 percent, even as the NNPCL has announced a soaring PMS price increase at the pump.
“This move unveils a new era of regressive and punitive policies, and its impact is destined to deepen the domestic cost-of-living crisis and exacerbate Nigeria’s already fragile economic growth.”
