The Minister of Finance and Coordinating Minisiter for the Economy, Wale Edun has said that the federal government has not increased the value-added tax (VAT) to 10 percent.
In a statement on Monday, Edun clarified that the current VAT rate, as stipulated in the country’s tax laws, remains at 7.5 percent.
“The current VAT rate is 7.5% and this is what government is charging on a spectrum of goods and services to which the tax is applicable,” Edun said.
“Therefore, neither the Federal Government nor any of its agencies will act contrary to what our laws stipulate.”
Edun said the tax system stands on a tripod which includes tax policy, tax laws, and tax administration.
The minister said all three elements must work together to create a sound system that gives vitality to the government’s fiscal position.
He said the government’s focus is to utilise fiscal policy in ways that promote sustainable economic growth, alleviate poverty, and promote a thriving business environment.
“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 government is out to make life difficult for Nigerians,” he added.
“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.”
On May 8, Taiwo Oyedele, chairman of the presidential committee on fiscal policy and tax reforms, said there is a need to increase the VAT rate.
Atiku Abubakar, former vice-president, on September 8, criticised the proposed VAT increase.
Atiku described the move as “regressive and punitive policy”, adding that its impact could deepen the domestic cost-of-living crisis.
