FG debunks rumoured plans of VAT hike
The Minister of Finance and the Coordinating Minister of the Economy, Wale Edun, said on Monday the Federal Government has not increased the Value-Added- Tax (VAT) to 10%.
Former Vice President Atiku Abubakar on Sunday condemned the planned increase in VAT as canvassed by the chairman of the presidential committee on fiscal policy and tax reforms, Taiwo Oyedele.
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Oyedele had in a recent presentation to the government stressed the need for an increase of the VAT rate.
Atiku described the move as a “regressive and punitive policy” that would increase the cost of living in the country.
Edun, who reacted to the remark in a statement, clarified that the current VAT rate as stipulated in the country’s tax laws, remains at 7.5%
He said: “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.”
The minister said the tax system stands on a tripod which includes tax policy, tax laws, and tax administration.
He pointed out that 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 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.
“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,” the minister concluded.
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