The proposed increment of Value Added Tax (VAT) from 5 per cent to 7.2 per cent has generated reactions from Nigerians, with many condemning the development.
The minister of finance, budget and national planning, Zainab Ahmed, had disclosed it at the end of the Federal Executive Council meeting on Wednesday, September 11.
She said: “We also reported to council and council has agreed that we start the process towards the increase of the VAT rate. We are proposing and council has agreed increase the VAT rate from five percent to 7.2 percent. This is important because the federal government only retains 15 percent of the VAT — 85 percent is actually for the states and local governments and the states need additional revenue to be able to meet the obligations of the minimum wage.
“This process involves extensive consultations that need to be made across the country at various levels and also it will involve the review of the VAT act. So, it is not going to be implemented immediately until the act is reviewed.”
The minister said this was to address the issue of new minimum wage.
Nigerians took to social media to express their opinion about the government’s move. While some acknowledged that the country has one of the lowest VAT rate in the world, others criticised the timing.
See some reactions below:
Some are saying that the federal government just wants to add to the suffering of Nigerians.
It appears the increase in VAT will have some unpleasant consequences.
According to Joe Abah, the increment is coming at a wrong time.
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Legit.ng had reported that the Federal Executive Council approved the increase in Value Added Tax rate to 7.2% from its previous 5%.
It should be noted that the new development is still subject to an amendment of the 1994 VAT act by the National Assembly.
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