VAT remains at 7.5% – Minister

Wale Edun, the Minister of Finance, has stated that the federal government has not raised the value-added tax (VAT) to 10 percent.

In a statement released on Monday, Edun clarified that the VAT rate remains at 7.5 percent, in accordance with the country’s tax laws.

“The current VAT rate is 7.5%, and this is what the government is applying to a range of goods and services subject to the tax,” Edun said.

“Therefore, neither the Federal Government nor any of its agencies will act against what our laws prescribe.”

Edun explained that the tax system is built on three pillars: tax policy, tax laws, and tax administration. He emphasized that these elements must work in harmony to create a robust system that supports the government’s fiscal health.

The minister also highlighted the government’s focus on using fiscal policy to foster sustainable economic growth, reduce poverty, and create a thriving business environment.

“Some media reports and opinion articles on the VAT issue seem to incorrectly suggest that the government is intent on making life more difficult for Nigerians,” he added.

“That is not accurate. On the contrary, the federal government has shown through its policies a commitment to creating a favorable environment for businesses to prosper.”

He further noted that, as part of its efforts to provide relief to Nigerians and businesses, the federal government recently suspended import duties, tariffs, and taxes on essential food items like rice, wheat, and beans.

Earlier, on May 8, Taiwo Oyedele, chairman of the presidential committee on fiscal policy and tax reforms, mentioned the need to raise the VAT rate. However, former Vice President Atiku Abubakar criticized the proposed increase on September 8, calling it a “regressive and punitive policy” that could exacerbate the domestic cost-of-living crisis.