President Muhammadu Buhari has come ut to say that the Finance Bill 2019 he sent to the National Assembly, when passed into law, will allow the government to raise Nigeria’s Value Added Tax (VAT) from 5 to 7.5 per cent.
He revealed this when he presented the 2020 Appropriation Bill to the joint session of the National Assembly in Abuja on Tuesday.
He believes the additional revenues will also help to enhance health, education and infrastructure programmes in the country.
His words, “The draft Finance Bill proposes an increase of the VAT rate from five per cent to 7.5 per cent As such, the 2020 Appropriation Bill is based on this new VAT rate.
”The additional revenues will be used to fund health, education and infrastructure programmes.
”As the States and Local Governments are allocated 85 per cent of all VAT revenues, we expect to see greater quality and efficiency in their spending in these areas as well.”
“Accompanying the 2020 Budget Proposal is a Finance Bill for your kind consideration and passage into law.
“This Finance Bill 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 and 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.
“Additionally, our proposals also raise the threshold for VAT registration to N25 million in turnover per annum, such that the revenue authorities can focus their compliance efforts on larger businesses thereby bringing relief for our Micro, Small and Medium-sized businesses.”