The Federal Executive Council (FEC) which President Muhammadu Buhari presided over on Wednesday, approved the increment of value-added tax (VAT) rate from 5 percent to 7.2% percent in a bid to increase government revenues.
The Minister of finance, budget and national planning, Mrs Zainab Ahmed confirmed the increment at the end of the cabinet meeting. The new rate will not be implemented immediately until the act was reviewed by the national assembly.
This represents a 44% increase (VAT has remained at 5% since January 1, 1994, when it became active).
We also reported to council and council has agreed that we start the process towards the increase of the VAT rate. We are proposing and council has agreed to increase the VAT rate from 5 percent to 7.2 percent.
This is important because the federal government only retains 15 percent of the VAT – 85 percent is actually for the states and local governments and the states need additional revenue to be able to meet the obligations of the minimum wage.
This process involves extensive consultations that need to be made across the country at various levels and also it will involve the review of the VAT act. So, it is not going to be implemented immediately until the act is reviewed.” Zainab Ahmed said.
The proposed increment has drawn condemnation and outrageous comments among Nigerians on Social media.
The new born VAT is a favored and blessed child of the priests;they will not cursed it with the affliction of multiple committees and the perdition of stunted growth and take off like the minimum wage.
— Senator Shehu Sani (@ShehuSani) September 12, 2019
I stand against the PROPOSED increase of VAT. For your information, it has not been increased yet. It is a proposal by the executive which will have to be debated on the floor of the National Assembly. I will argue against it and I’m sure it will be thrown out.
— Oloye Akin Alabi (@akinalabi) September 12, 2019
I have nothing again increase in VAT, we can’t sustain this economy on 5% tax and ours is one of the lowest in the world. What I have issues with are:
1. Multiple taxation
2. Rent seeking
3. A business environment so tough it doesn’t justify the tax
— Oluyomi Ojo (@OluyomiOjo) September 11, 2019
" FEC approved VAT increase to 7% "
Electricity tariff increased
Fuel price increase by 2020
5% charges on every online transaction by 2020
More and more taxes
Less and less accountability and development
" recalibrate, live within your means and damn the poverty "
— Nafiu T (@nafeezi) September 11, 2019
Nigeria 2019: Vat to 7.2%
Tunisia 2018: from 20% to 7%
Ghana in 2017: from 17.5% to 3%
Egypt 2019: Proposed reduction to 5%
All over the world economies are cutting down VAT to stimulate economic growth. But the Nigerian govt is doing the opposite because it has no ideas.
— Young Otutu (@YoungOtutu) September 12, 2019
Most Nigerians are silent on this VAT to 7.2% hike cos they are ignorant of the consequences. Here're a few takes:
— Afri-Sagacity (@afrisagacity) September 12, 2019
To celebrate their victory yesterday, they haff increased VAT to 7.2 percent ? #PEPT
— Onyeka John CFC(Nwa wawa) (@onyeka18) September 12, 2019
FG increases VAT from 5% to 7.2%, in a country with insecurity, poor infrastructures, poor economy, and unpaid new minimum wage signed into law since January, the FG is ready to add more to the suffering of Nigerians by increasing Tax. This is next level of suffering for the poor
— Zaddy Ajala (@UNCLE_AJALA) September 12, 2019
FG raised VAT to 7.2% and Nigerian are grumbling but majority don't pay tax.
— Doctor Sunday (@sunaizo4real) September 12, 2019
Buhari wants to increase VAT to 7.2 in order yo increase FG revenue to fund budget. Here's an idea. Invest in the tourism economy, fix security and electricity. Watch tourism tax and FDI give us in 10 years what 20% VAT sef will not give us in 50.
It is not rocket science.
— Dr Oluniyi Gates M.D. J.D. Ph.D. (@OluniyiGates) September 12, 2019
So, let's get this straight:
?Buhari closes border (sending food prices through the roof), then raises VAT to 7.2%, as if to be certain the affliction goes round
?Kidnappings, abductions, murders, already normal
?And there is ZERO outrage
?Who bewitched us?
— The Son of Man (@olufemisp) September 12, 2019
The increase of VAT to 7.2% is most welcome. Only weeks back online VAT was pegged at 5%
It is for only non-APC people. All Buharists are exempted.
I tweeted on Monday about increase in cost of food, now everything else will go up.
— the Morris Monye factor (@Morris_Monye) September 12, 2019
FGN hiked VAT to 7.2% on the very day they got a favourable ruling from PEPT. A curious coincidence! We're beginning to reap the dividend of our electoral decision of 23/2/2019.
— John Danfulani (@john_danfulani) September 12, 2019
Let us all say good bye to cashless policy
And bid most of our online stores Adieu
I won’t buy a laptop that is sitting on Jumia store shelf with VAT of 7.2% and pay another VAT of 7.2 for delivery.
I rather hop Keke Napeb to get my lappy myself at computer village
VAT to 7.2% pic.twitter.com/Hv9gpxzNJU
— Oloye Ayo Gbadebo (@holudaray) September 12, 2019
Nig with none of the basic amenities & no incentives for SME ar increasing VAT to 7.2% as if it isn't enough that for a business to thrive in Nigeria, the business owner, must provide all the amenities he needs for himself.
— Pecky (@PeckyOfficial) September 12, 2019
By increasing the VAT to 7.2%, the federal government is adding salts and insult to the wounds of poor Nigerians ? pic.twitter.com/d6dnKP7U29
— Xxxclusivecollections (@xxxclusivewears) September 12, 2019
Nigerians are too quiet and like taking nonsense. This is the way everyone is cool when our leaders change prices of things as they please. VAT to 7.2 just like that #Nigerians
— Demmy (@dplumptre) September 12, 2019
The 30k minimum wage hasn't been fully implemented, they've raised "VAT to 7.2%" claiming 80% of it goes to State & Local Govts. They're giving us the #NextLevel in doses
— Jerroid™ (@MankilikJerry) September 12, 2019