Senate Says 7.5% VAT Increase Won’t Affect Purchasing Power

• Senate Says 7.5% VAT Increase Won’t Affect Purchasing Power

The Senate has said the recently increased Value Added Tax (VAT) won’t affect the purchasing power of an average Nigerian.

The Senate President, Ahmad Lawan, stated while speaking on the measures being taken by President Buhari to reduce pressure of the new Finance Law on an average Nigerian.

Lawan explained that the new 2.5 percent incease would only affect luxury goods and not every day items that impact the masses.

“The 2.5% increment in VAT does not include items that ordinary Nigerians normally use. Many of the items that would now have an additional 2.5% increment are luxury items that ordinary Nigerians don’t use,” Lawan said.

He added that the nation was in need of additional resources to deepen basic amenities and up revenue generation necessary to support Nigerian growing population.

According to him, this brought about changes in government policies, some of which are already in effect and others will be fully implemented by February 1, 2020.

While the Buhari administration had said 85 percent of revenue generated from VAT would be distributed to the states, its unclear how 5 percent VAT imposed on online transactions would not affect purchasing power or broader business activities.