Grapevine

Why we propose VAT hike on non-essential items – Oyedele

Nigeria’s Presidential Fiscal Policy and Tax Reforms Committee has proposed an increase in Value Added Tax (VAT) on non-essential goods to offset VAT reduction on essential items like food, healthcare, and education.

The committee chair, Taiwo Oyedele, said this in a repeat post via his X handle on Monday.

Mr Oyedele said the committee is also proposing to reduce the VAT rate to zero per cent (0%) on food, health, education, with exemption for rent, transportation, and small businesses.

“The upward rate adjustment is on non-essential items to partly offset the impact of the reduction in rate and exemption for essential items ensuring that the masses are protected and providing some cushion for states who earn 85% of VAT revenue.

“Businesses will also get full credit for the VAT they pay on their assets and services, thereby lowering their overall costs and moderating inflation,” he said.