FG Denied Claims Of VAT Increase

Nigeria’s value-added tax (VAT) may rise from 7.5 percent to 10 percent, but the federal government has denied rumors that this is being considered.

The clarification came from the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, in a statement he issued and signed on Monday, September 9.

Edun emphasised the government’s dedication to fiscal stability and reassured Nigerians that President Bola Ahmed Tinubu’s administration is committed to implementing sustainable economic policies without placing additional strain on citizens.

Edun categorically stated that the current VAT rate remains unchanged at 7.5 percent, dismissing speculation about a possible increase to 10 percent.  He stressed that there is no proposal or plan under review by the government to raise VAT, contrary to recent reports.

“The current VAT rate is 7.5 percent, 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,” the Minister explained

The statement was a direct response to media reports and opinion pieces suggesting the government was preparing to increase VAT as part of its economic recovery strategy.

Such reports, according to Edun, have created unnecessary panic and misinformation among the public.

Edun maintained the administration’s commitment to using fiscal policy to achieve robust and sustainable economic growth, reduce poverty, and foster an enabling environment for businesses to flourish.

He underscored the importance of a balanced and stable tax system for Nigeria’s fiscal health, highlighting that tax policy, tax laws, and tax administration must work in harmony.

“The tax system stands on a tripod, namely tax policy, tax laws, and tax administration. All three must combine well to give us a sound system that gives vitality to the fiscal position of the government,” Edun stated.

Contrary to the narrative that the government is seeking to impose more financial hardships on Nigerians, the Minister pointed out several relief measures taken by President Tinubu’s administration to mitigate the impact of inflation and rising food prices.

Edun noted that recent suspensions on import duties for essential commodities, including rice, wheat, and beans, are part of the government’s efforts to ease economic pressure on both businesses and consumers.

“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 emphasized.

These policies are designed to not only stabilize the economy but also to ensure food security by making staple goods more affordable for the average Nigerian.

The Minister urged Nigerians to disregard unverified reports and assured the public that any tax reforms or adjustments would be communicated through official government channels.

He emphasized the importance of relying on accurate information to prevent misinformation and unnecessary anxiety among the public.

“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,” Edun said.

The Ministry of Finance, he added, remains committed to transparent communication on all tax and economic policies to keep citizens well-informed and to avoid any confusion regarding the government’s fiscal decisions.