VAT remains 7.5%, no hike planned –Edun

The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has categorically refuted circulating claims that the Federal Government has increased the Value-Added Tax (VAT) rate from 7.5% to 10%. In a formal statement released on Monday, Edun reassured Nigerians that the current VAT rate, as specified by the relevant tax laws, remains unchanged at 7.5%.

In the statement, Edun emphasised; “The VAT rate is firmly set at 7.5%, as stipulated in our tax legislation, and this is the rate being applied to goods and services. Neither the Federal Government nor any of its agencies will act outside the scope of these laws.”

He further highlighted the integrity of Nigeria’s tax system, which operates on three fundamental pillars: “tax policy, tax laws, and tax administration. “These three elements must work in harmony to ensure a robust fiscal framework that supports the government’s financial health,” Edun explained.

Addressing concerns raised by some media reports and opinion pieces that suggested the government was taking steps that would burden the populace, Edun made it clear that such interpretations were misguided. “Contrary to what is being insinuated, the Federal Government is deeply committed to fostering an economic environment where businesses can thrive, and where poverty is actively reduced through sound fiscal policies,” he affirmed.

Edun also pointed out that recent government actions demonstrate a clear intent to provide relief to Nigerians and support businesses.

“As part of our ongoing efforts to ease the economic pressure on the public, the government recently halted the collection of import duties, tariffs, and taxes on essential food items, including rice, wheat, and beans.

This move underscores our dedication to ensuring that Nigerians can access affordable food supplies amid global economic challenges.”

In reiterating the VAT rate, Edun added; “For the avoidance of doubt, as of today, VAT remains at 7.5%, and this is the rate that will be applied to all VAT-able goods and services. The government remains focused on using fiscal policy as a tool to stimulate sustainable growth and ensure that businesses can operate in a supportive and stable environment.”

Edun said the clarification aims to put to rest any lingering concerns or misunderstandings surrounding VAT and reinforced the government’s dedication to stability and transparency in its tax policies.