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Nigeria’s Finance Minister, Wale Edun, has swiftly debunked rumors of a proposed hike in Value-Added Tax (VAT) from 7.5% to 10%, setting the record straight on the country’s economic plans.
With his signature affixed to a statement released on Monday, Minister Edun provided unequivocal confirmation that the VAT rate will hold steady at 7.5%, in full compliance with Nigeria’s tax laws.
“The current VAT rate is 7.5% and this is what the government is charging 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,” Edun affirmed.
Edun further elucidated the crucial need for a harmonious tax ecosystem, highlighting that Nigeria’s tax architecture rests on a triad of fundamental pillars: tax policy, tax legislation, and tax administration – a balanced framework designed to promote economic stability.
“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,” the minister said.
Edun sought to alleviate concerns that government actions might be counterproductive, stressing that Nigeria’s fiscal policies are, in reality, precision-crafted to propel economic growth, alleviate poverty, and foster an environment conducive to prosperity.
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“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,” he stated.
Edun strongly refuted media allegations that the government was intent on piling more hardship on Nigerians, labeling such reports as false and not reflective of the administration’s policy objectives.
“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,” he stated.
To address the pressing issue of food affordability, the government has implemented a suite of measures aimed at minimizing the economic impact of food imports on citizens and supporting those most affected by rising costs.
“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,” Edun noted.
For absolute clarity, Edun reiterated that the 7.5 percent VAT rate is here to stay, and will continue to be applied across the board to all goods and services that meet the VAT eligibility criteria.
He emphasized that, as of today, the VAT rate would hold steady at 7.5%, and all goods and services liable for VAT would be charged at this rate.
