- FG to Begin Implementation of 7.5% VAT Next Month
The new Finance Bill signed into law by President Muhammadu Buhari earlier this week will be implemented from February 1, 2020, the Minister of Finance, Mrs. Zainab Ahmed has stated.
The Bill, which will see Nigerians paying 50 percent increase in Value Added Tax (VAT) from 5 percent to 7.5 percent, will also exempt Small and Medium Businesses from paying tax in an effort to deepen growth through new job creation and improved economic activities.
Ahmed, who was at the inauguration of the board of the Federal Inland Revenue Service, said: “The implementation of the Value Added Tax is to take effect from February 1, 2020, after all the necessary administrative procedures have been completed, especially the gazette of the Act by the Federal Ministry of Justice.”
Despite criticism, the Federal Government insisted that the current revenue generation remained low at about 7 percent to GDP. The President Buhari administration had insisted on upping revenue to GDP ratio to 15 percent.
The Minister of finance said the nation’s revenue to GDP is one of the lowest in Africa and the world at large, therefore, she said to effectively diversify the economy and broaden its revenue generation, the government must increase Value Added Tax enough to substantially finance 2020 budget.