The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has announced the federal government's plan to raise the Value Added Tax (VAT) to 15%, with the increase focused primarily on luxury goods.
Speaking at an investor meeting during the ongoing IMF/World Bank Annual Meetings in Washington DC, Edun clarified that a bill currently under review by the National Assembly seeks to implement this VAT hike. However, essential goods used by vulnerable Nigerians will either remain exempt or be subject to a zero tax rate.
"In terms of VAT, President Bola Tinubu’s priority is protecting the poorest and most vulnerable while carrying out necessary reforms," Edun stated. He explained that luxury goods consumed by the wealthy will face the increased VAT, while essentials for the general public will either be exempt or taxed at zero percent.
A list of these essential goods that will be exempt from VAT is expected to be released to the public soon.
Edun also shared positive news regarding Nigeria’s oil sector, citing improved security in oil-producing regions and new investments from companies like Total and ExxonMobil. These developments, he said, will help boost oil production and improve foreign exchange earnings for the country.
On the issue of fuel subsidy removal, Edun mentioned that while the reforms had been announced earlier, their full implementation only began last month. He emphasized that the financial savings from this subsidy removal will have a more significant impact on the economy in the coming months.
Addressing Nigeria’s financial strategies, Edun noted that the government had decided to issue domestic dollar bonds despite recommendations from the International Monetary Fund (IMF) against doing so. He assured that Nigeria values its partnership with the IMF but retains the right to make its own financial decisions.
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