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FG approves Increment of VAT from 5% to 7.2%

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Zainab Ahmed

The federal government has approved the increment of the Value-Added tax (VAT) from 5% to 7.2%.

Value Added Tax (VAT) is payable on goods and services consumed by any person, whether government agencies, business organisation or individuals.

The Minister of Finance, Budget and National Planning, Zainab Ahmed confirmed the approval of the increase at the end of the weekly Federal Executive Council (FEC) on Wednesday, September 11th.

The new rate which will take effect from sometime in 2020, is however subject to an amendment of the VAT act of 1994 by the National Assembly.

“This is important because the federal government only retains 15% of the VAT, 85% is actually for the states and local government and the state needs 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, according to Punch.

Well, check out how Nigerians are accepting the news on twitter

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