FG Clears Air on Another Tax Hike After Instructing Fintechs to Deduct N50 From Customers’ Account

• Rumors that the Value-Added Tax (VAT) rate was increased from 7.5% to 10% on Monday were denied by FG
• The Minister reaffirmed that, as per the relevant tax regulations, goods and services are subject to a 7.5% VAT rate
• He further stated that none of the Federal Government's agencies will behave in a way that is inconsistent with its legal requirements

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.

Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, refuted rumors circulating on Monday indicating that the Value-Added Tax (VAT) rate had been raised to 10% from 7.5%.

In a statement he signed, the minister confirmed that the 7.5% VAT rate that is applicable to goods and services under applicable tax rules still stands.

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“The current VAT rate is 7.5% and this is what the government is charging on a spectrum of goods and services to which the tax is applicable. Therefore, neither the Federal Government nor any of its agencies will act contrary to what our laws stipulate.

“The tax system stands on a tripod, namely tax policy, tax laws and tax administration.

According to him, all three need to work well together to create a solid structure that strengthens the government's financial position.

The minister added that the administration wants to use fiscal policy in a way that lowers poverty and fosters robust, sustained economic growth.

“The imputation in some media reports on the issue of VAT and the opinion articles that have sprouted from them seem to wrongly convey the impression that the government is out to make life difficult for Nigerians. That is not correct. If anything, the Federal Government has, through its policies, demonstrated that it is committed to creating a congenial environment for businesses to thrive.

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“Please be informed”: FG orders fintechs to start N50 deductions on customers’ accounts, date set

“In fact, it is on record that the Federal Government, as part of efforts to bring relief to Nigerians and businesses, recently ordered the stoppage of import duties, tariffs and taxes on rice, wheat, beans and other food items.

“For emphasis, as of today, VAT remains 7.5% and that is what will be charged on all the goods and services that are VAT-able,” Edun said.

FG Orders Fintechs To Start N50 Deductions

Legit.ng reported that fintech companies such as Moniepoint, Palmpay, and others have begun informing their customers about plans to implement the N50 Electronic Money Transfer Levy (EMTL).

This deduction will apply to every inflow of N10,000 or more received by customers starting Monday, September 9, 2024.

According to the fintech companies, this deduction is in accordance with the Federal Inland Revenue Service (FIRS) directive.

Source: Legit.ng