Nigeria’s President, Muhammadu Buhari has said that the Finance Bill 2019 he forwarded to the National Assembly will permit the government to raise the country’s Value Added Tax (VAT) from 5 to 7.5 percent when passed into law.
President Buhari stated this on Tuesday while presenting the 2020 Appropriation Bill to the joint session of the National Assembly in Abuja.
His words: “The draft Finance Bill proposes an increase of the VAT rate from five percent to 7.5 percent. As such, the 2020 Appropriation Bill is based on this new VAT rate.
“The additional revenues will be used to fund health, education and infrastructure programmes. As the States and Local Governments are allocated 85 percent of all VAT revenues, we expect to see greater quality and efficiency in their spending in these areas as well.”
According to the President, the VAT Act exempts pharmaceuticals, educational items, and basic commodities, adding that the exemptions are being expanded under the Finance Bill, 2019.
He further listed specific items which would also be exempted from the proposed VAT to include brown and white bread, cereals including maize, rice, wheat, millet, barley and sorghum, fish, flour and starchy meals.
Other items, he said, are fruits, nuts, pulses and vegetables of various kinds; roots such as yam, cocoyam, sweet and Irish potatoes; meat and poultry products including eggs and milk; salt and herbs of various kinds as well as natural and table water.
According to the President, the bill has five strategic objectives aimed at promoting fiscal equity, reforming domestic tax laws and raising revenue for the government.