Senate Raises VAT To 7.5%

The Senate on Thursday approved the increment of  Value Added Tax (VAT) from 5% to 7.5 %.

The approval followed the presentation of a report on the ‘Nigeria tax and fiscal law’ bill by the chairman of the finance committee, Solomon Olamilekan.

Recall that the Minister of Finance, Budgeting and Planning, Zainab Ahmed in September announced a 50%  increase in  VAT  on the supply of goods and services after its initial approval by the federal executive council (FEC) on Wednesday, 11 September 2019.

The FEC’s approval was later sent to the National Assembly for consent.

Upon its approval by FEC Senator Ali Ndume rejected the increase saying it would bring discomfort many  Nigerians as the prices of goods and services are bound to hit the roof.

The senator subsequently suggested a 9% communication service tax instead.

The International Monetary Fund (IMF) had lauded the nation on its tax increment saying calling it a step in the right direction for the country as it will contribute to declining revenue.

The 2.5% VAT increase will now take effect in 2020.