Nigerians will now start paying 7.5 percent as Value Added Tax (VAT) after its increase was captured in the newly approved 2019 finance law. President Muhammadu Buhari on Monday in Abuja signed the 2020 Finance Bill into law, increasing it from an initial 5 percent.
A statement by the Special Adviser to the President on Media and Publicity, Femi Adesina explained that the Finance law has five strategic objectives, in terms of achieving incremental, but necessary, changes to our fiscal laws.
“These objectives are; Promoting fiscal equity by mitigating instances of regressive taxation; Reforming domestic tax laws to align with global best practices; Introducing tax incentives for investments in infrastructure and capital markets; Supporting Micro, Small and Medium-sized businesses in line with our Ease of Doing Business Reforms; and Raising Revenues for Government.
“The draft Finance Bill proposes an increase of the VAT rate from five percent to 7.5 percent, as such, the 2020 Appropriation Bill is based on this new VAT rate,” he added.