By Damilare Adeleye
The federal government has denied report that the Value Added Tax has been increased to 10%.
Recall that the Chairman of Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, while speaking during an interview on Channels TV, had said that the committee was proposing a law to the National Assembly to increase VAT from the current 7.5% to 10%.
Oyedele said, “The law we are proposing to the National Assembly has the rate of 7.5% moving to 10% from 2025. We don’t know how soon they will be able to pass the law. Then subsequent increases are also indicated in terms of the year they will kick in.”
Meanwhile, in a statement issued on Monday, the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, clarified that the VAT rate remains unchanged at 7.5 per cent, in accordance with the nation’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.
“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.
He noted that the government’s fiscal policies are meant to promote economic development not to encourage poverty.
“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.
Controversy had greeted the news that the government was planning to increase VAT from 7.5% to 10%.
Former presidential aspirant of the Peoples Democratic Party, Atiku Abubakar had accused the government of planning to add to the financial burden of Nigerians despite the current economic hardship.
Atiku, in a post on X on Sunday, said the VAT increment was set to become the blazing inferno that would consume the essence of Nigerians.
According to him, the move by Tinubu’s government would unveil a new era of regressive and punitive policies, adding that its impact was destined to deepen the domestic cost-of-living crisis and exacerbate Nigeria’s already fragile economic growth.