THE federal government says it has not increased the value-added tax (VAT) to 10 per cent as been speculated.
It says that the current VAT rate is 7.5 per cent which is what the government is charging on a spectrum of goods and services to which the tax is applicable
This was disclosed in a statement on Monday, September 9, by the minister of finance, Wale Edun.
Edun clarified that the current VAT rate, as stipulated in the country’s tax laws, remains at 7.5 per cent.
“Therefore, neither the federal government nor any of its agencies will act contrary to what our laws stipulate,” Edun stated.
According to Edun, a tax system’s effectiveness hinges on the synergy between tax policy, tax laws, and tax administration.
He noted that the government seeks to utilise fiscal policy as a tool for promoting economic growth, reducing poverty, and fostering a thriving business environment.
Edun dismissed misconceptions surrounding VAT, stating that recent media reports and opinion articles have inaccurately portrayed the government as intentionally burdensome to Nigerians.
He clarified that impression is erroneous and in reality, the federal government has consistently demonstrated its commitment to fostering a favourable business environment through its policies.
“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 added.
On May 8, the chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, called for an increase in the VAT rate.
The ICIR reported that a former vice-president, Atiku Abubakar described the ‘plan’ by President Bola Tinubu to increase VAT as an action that reflects a profound insensitivity.
Atiku, who was the candidate of the Peoples Democratic Party (PDP) in the 2023 general election, said the action is set to become a blazing inferno that will consume the very essence of the people.
In a statement he signed on his X handle on Sunday, September 8, he declared that Tinubu, alongside his advisers, has resolved to raise the VAT rate from 7.5 per cent to 10 per cent.
He said this is coming after the NNPCL has announced a soaring PMS price increase at the pump.
Atiku claimed that Tinubu’s economic policies have far-reaching implications for Nigeria’s future and the continuous increase in taxes and interest rates has severely impacted businesses, resulting in widespread job losses and exacerbating poverty.
According to him, the manufacturing sector has struggled since Tinubu’s inauguration, with its GDP contribution decreasing by over 20 per cent since December 2023.
He urged Tinubu and his advisers to redirect their efforts towards crafting sustainable solutions to the systemic shocks afflicting the economy rather than compounding the crisis with measures destined to ignite further turmoil.
The ICIR made unsuccessful efforts to obtain clarification from the government on this.
Multiple calls, text messages, and WhatsApp messages were sent to Bayo Onanuga, the special adviser on information and strategy to the president, seeking a reaction but he failed to respond.
A reporter with the ICIR
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