The Federal Government has confirmed its plans to increase the Value Added Tax (VAT) rate, focusing primarily on luxury goods.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, revealed this during an investor meeting at the IMF/World Bank Annual Meetings in Washington DC.
Edun explained that the proposed VAT hike, currently being considered by the National Assembly, will be implemented gradually and will mainly impact luxury items, ensuring that essential goods consumed by poorer and vulnerable Nigerians remain exempt or attract a zero rate.
He stated: “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.”
Edun further assured that a list of essential goods exempt from VAT will be made public.
“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,” he added.
In September, Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, disclosed that the committee was proposing legislation to the National Assembly to raise VAT from the current 7.5% to 10%.
