The Federal Government plans to raise the Value Added Tax (VAT) to 15%, focusing primarily on luxury goods. This was disclosed by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, during the ongoing IMF/World Bank Annual Meetings in Washington, DC.
Edun highlighted that a bill currently before the National Assembly proposes a gradual increase in VAT on luxury items, while essential goods consumed by poorer Nigerians would remain VAT-free or attract a zero rate.
He assured that President Bola Tinubu’s administration is committed to protecting vulnerable citizens while implementing necessary economic reforms.
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Edun further explained that the list of essential goods exempt from VAT would be made public soon. In line with these reforms, Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, had earlier proposed increasing VAT from the current 7.5% to 10% by 2025, citing a revenue shortfall as a critical challenge.
These adjustments aim to generate additional revenue while ensuring that the poorest are shielded from the impact of the VAT increase.
