Economy: FG Plans 15 Percent VAT Despite Denial

A bill to raise the Value Added Tax, VAT, to 10 percent is currently before the National Assembly.

The Cable reports that the lawmakers are considering raising the VAT rate to 10 percent from the current 7.5 percent.

Recall that Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, had earlier in the year suggested the need to increased VAT.

VAT is a consumption tax on goods and services levied at each stage of the supply chain where value is added.

The administration of President Muhammadu Buhari raised the VAT rate to the current rate from five percent, citing the need to raise more revenues for the government.

Recent reports suggest that President Bola Ahmed Tinubu’s administration was considering a further hike, the government however denied such plan.

The rebuttal was issued by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, even though there are pointers that the government is poised for another VAT hike.

In the executive bill seen by newspaper, the national assembly is seeking to raise the tax rate to 10 percent by 2025.

The legislature also intends to increase the VAT to 12.5 percent by 2026 through 2029, according to the document.

“VAT shall be charged on the value of all taxable supplies at the following rates (a) 2025 year of assessment 10%; (b) 2026, 2027 2028 and 2029 years of assessment 12.5% (c) 2030 year of assessment and thereafter 15%,” the document reads.”

Edun had assured that the federal government had no plan to increase VAT clarifying “that there is no such proposal under consideration.”

The minister’s rebuttal was contained in a statement issued by the Director, Information and Public Relations, Federal Ministry of Finance, Mohammed Manga, where he explained that the current VAT remains unchanged.

The statement read: “The Federal Government has officially debunked reports suggesting that the President Bola Ahmed Tinubu-led Administration plans to raise Nigeria’s Value-Added Tax (VAT) from 7.5% to 10%.”

“In a statement issued earlier today [Monday] morning, the Honourable Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, clarified that there is no such proposal under consideration, emphasising President Tinubu’s commitment to fiscal stability.

“HM Edun highlighted that the current VAT rate remains unchanged, and that the Federal Government is focused on strengthening the economy through sustainable policies aimed at reducing inflationary pressures without burdening citizens.

“He also stressed that recent fiscal measures, such as suspensions on import duties for key goods, are part of President Tinubu’s efforts to alleviate economic hardship.

“The Federal Ministry of Finance remains committed to transparent communication on all tax and economic policy matters, ensuring that citizens are well-informed and not misled by unfounded reports.

“The minister assured the public that any future tax reforms would be announced through official government channels to avoid misinformation.”