The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has addressed recent speculation about a potential increase in the Value-Added Tax rate, denying reports suggesting that the Value-Added Tax rate will increase from 7.5% to 10%.
In his statement released on Monday, Edun confirmed that there will be no change to the VAT rate, which remains at 7.5% in accordance with current 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 stated.
Edun highlighted the significance of a balanced tax system, underscoring that Nigeria’s tax framework relies on three key elements: tax policy, tax laws, and tax administration. This approach ensures stability and clarity in the country’s taxation practices.
He stated, “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.”
Edun addressed concerns about potential burdens from government actions by reassuring Nigerians that fiscal policies are designed to promote sustainable economic growth and alleviate poverty. He emphasized that these policies are intended to support long-term economic stability and improvement.
“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 said.
Edun responded to media reports alleging that the government is imposing additional hardships on citizens by calling them 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 actions designed to ease the financial burden on citizens, especially regarding 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 reiterated that the VAT rate remains at 7.5% and will continue to apply to all VAT-eligible goods and services. “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
