THE National Assembly is considering a bill proposing an increase in the Value-Added Tax (VAT) from 7.5 per cent to 10 per cent.
Note that VAT refers to a consumption tax on goods and services levied at each stage of the supply chain where value is added.
According to media reports, in the executive bill, the National Assembly is seeking to raise the tax rate to 10 per cent by 2025. The legislature also intends to increase the VAT to 12.5 per cent by 2026 through 2029, according to the document.
“VAT shall be charged on the value of all taxable supplies at the following rates (a) 2025 year of assessment 10%; (b) 2026, 2027 2028 and 2029 years of assessment 12.5% (c) 2030 year of assessment and thereafter 15%,” the document read.
Recall that on May 8, Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, had said the VAT rate needs to be increased.
Reacting to the recommendation on September 8, Atiku Abubakar, former Vice-President criticised the proposed VAT hike, describing it as a “regressive and punitive policy”.
However, Wale Edun, Minister of Finance, on September 9, said the VAT rate has not been unchanged.
