Nigerians and foreign nationals in the country will start paying the new 7.5 per cent Value Added Tax (VAT) with immediate effect following President Muhammadu Buhari’s signature to Nigeria’s Finance Bill 2020.
Buhari signed the bill a month after its passage by the National Assembly in December 2019. It was presented with 2020 Appropriation Bill which he has also signed.
PerSecondnews recalls that the VAT was increased by 50 per cent from 5 per cent to 7.5 per cent by NASS as proposed by the Executive.
The Federal Executive Council (FEC) had on Wednesday, September 11, 2019, approved a 50% increase in VAT payable on supply of goods and services in Nigeria.
“This Finance Bill has five strategic objectives, in terms of achieving incremental, but necessary, changes to our fiscal laws.
￼“These objectives are; Promoting fiscal equity by mitigating instances of regressive taxation; Reforming domestic tax laws to align with global best practices; Introducing tax incentives for investments in infrastructure and capital markets; Supporting Micro, Small and Medium-sized businesses in line with our Ease of Doing Business Reforms; and Raising Revenues for Government.
“The draft Finance Bill proposes an increase of the VAT rate from five per cent to 7.5 per cent, as such, the 2020 Appropriation Bill is based on this new VAT rate,” Buhari said.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, said the new rate is expected to take effect in the first quarter of 2020.
Also, the Special Adviser to the President (Media and Publicity), Mr Femi Adesina, said with the assent, “there will be more revenue to finance key government projects especially in the areas of health, education and critical infrastructure.”