We have not increased Value Added Tax to 10% – FG

We have not increased Value Added Tax to 10% – FG 

The Federal Government has not increased the value-added tax (VAT) from 7.5 per cent to 10 per cent, says Minister of Finance and Coordinating Minister of the Economy, Mr Olawalale Edun.

He made the clarification in a statement on Monday, saying that the current VAT rate, as stipulated in the country’s tax laws, remains at 7.5 per cent.
“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.
He also said, “Neither the Federal Government nor any of its agencies will act contrary to what our laws stipulate.”
According to him, 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 was a need to increase the VAT rate.

Former Vice-President Atiku Abubakar on September 8 criticised the proposed VAT increase, describing it as a “regressive and punitive policy”.