FG Speaks On Reported Plans To Increase VAT Rate, Generates N1.56 Trillion in 3 Months
- Finance Minister Wale Edun has confirmed that the Value-Added Tax (VAT) rate remains unchanged at 7.5%
- This clarification comes amid rumours of plans to increase it to 10% to boost government revenue
- New data from the NBS shows that VAT revenue in Q2 2024 reached N1.56 trillion, a 9.11% increase from the previous quarter
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The Nigerian government has denied claims that the Value-Added Tax (VAT) rate has been increased from 7.5% to 10%.
Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, issued a statement reaffirming that the VAT rate remains unchanged at 7.5%, as stipulated by current tax laws.
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He further criticised recent media reports and opinion articles that suggested a VAT increase.
Edun emphasized that the government remains committed to adhering to the established tax rate and underscored its focus on using fiscal policy to foster sustainable economic growth, reduce poverty, and support business development.
Part of the statement reads:
"The current VAT rate is 7.5% and will continue to be charged on all applicable goods and services. The government is not considering any changes to this rate."
The minister also highlighted recent government measures aimed at alleviating economic pressures, such as the suspension of import duties, tariffs, and taxes on essential food items like rice, wheat, and beans
VAT revenue increase
Meanwhile, the National Bureau of Statistics (NBS) has revealed that the federal government generated N1.56 trillion from VAT in the second quarter of 2024(April to June).
The figure is a 9.11% increase from N1.43 trillion generated in the first quarter.
A breakdown from the NBS report showed that local VAT payments totalled N792.58 billion, foreign VAT payments amounted to N395.74 billion, and import VAT contributed N372.95 billion.
The NBS also revealed that human health and social work activities experienced the highest growth rate at 98.44%, followed by agriculture, forestry, and fishing at 70.26%. Conversely, activities related to households and real estate services showed the lowest growth rates.
In terms of sectoral contributions, manufacturing, information and communication, and mining and quarrying were the top contributors to VAT revenue in Q2 2024. On a year-on-year basis, VAT collections have surged by 99.82% compared to Q2 2023.
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.
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Source: Legit.ng
