The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has denied reports of a VAT rate increase from 7.5% to 10%.
In a statement released on Monday, Edun confirmed that the VAT rate remains at 7.5%, as specified by the country’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.
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He further stressed the importance of a balanced tax system, highlighting that Nigeria’s tax framework relies on three core pillars: tax policy, tax laws, and tax administration.
“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.
Addressing concerns about potentially burdensome government actions, Edun reassured Nigerians that fiscal policies are crafted to foster sustainable economic growth and alleviate poverty, rather than create obstacles.
“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.
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In response to media reports suggesting that the government was aiming to impose further hardship on citizens, Edun labeled these reports as inaccurate.
“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.
He also pointed out recent government efforts to reduce the financial strain on citizens, especially concerning food imports.
“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 clarity, Edun reaffirmed that the VAT rate remains at 7.5 percent and will continue to apply to all goods and services eligible for VAT.
“For emphasis, as of today, VAT remains 7.5% and that is what will be charged on all the goods and services that are VAT-able,” he concluded.
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