- FG Exempts Pads, Food Items, Others From New VAT Law
The Federal Government has exempted 20 food items, tuition fees of students in primary, secondary and tertiary institutions, sanitary towels manufactured locally from paying the new 7.5 percent Value Added Tax (VAT).
President Muhammadu Buhari had increased the nation’s VAT from 5 percent to 7.5 percent in an effort to up Nigeria’s revenue generation to GDP ratio.
While, the new financial law aims to broaden local manufacturing and deepen economic activities across sectors, experts have said it would worsen economic situation and hurt household income.
Federal Government, however, refuted that projection, saying local businesses (SMEs) were exempted to deepen their growth while larger companies were also taken into consideration.
In a statement released during the weekend, Laolu Akande, the Senior Special Assistant to the President on media and publicity said “To allay fears that low-income persons and companies would be marginalised by the new law, reduce the burden of taxation on vulnerable segments, and promote equitable taxation, the Finance Act 2019 had extended the list of goods and services exempted from VAT.
The statement listed additional exemptions as “Basic food items –additives (honey), bread, cereals, cooking oils, culinary herbs, fish, flour and starch, fruits (fresh or dried), live or raw meat and poultry, milk, nuts, pulses, roots, salt, vegetables, water (natural water and table water).
“Locally manufactured sanitary towels, pads or tampons.”
The Federal Government stated, “The Finance Act will support the funding and implementation of the 2020 budget. We shall sustain this tradition by ensuring that subsequent budgets are also accompanied by a finance law.”