FG INCREASES V.A.T TO 7.2 PERCENT
The federal executive council (FEC) has approved an increase in value added tax (VAT) rate from 5 percent to 7.2% percent. The increment is subject to an amendment of the VAT actor the National Assembly.
The Minister of Finance, Budget and National Planning, Zainab Ahmed who disclosed this at the end of FEC meeting on Wednesday said that, if approved by the National Assembly, the new rate will become effective in 2020.
Meanwhile, FEC has directed immediate consultations with states, local governments and other relevant stakeholders before the new rate takes effect in 2020. The meeting, was presided over by President Muhammadu Buhari.
VAT replaced the sales tax in 1994 and was pegged at 5% by the military government of Sani Abacha. Former president Olusegun Obasanjo increased VAT to 10% in 2007 at the twilight of his adminstration. Following opposition from labour, his successor, Umaru Musa Yar’Adua, reversed it to 5%.
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