The President said that the 2020 Appropriation Bill is based on this new VAT rate.Nigeria’s federal government has announced the exemption of no fewer than 20 more food, sanitary and other items from the Finance Act which increased the Value Added Tax (VAT) from 5 percent to 7.5 percent.
In a statement today, January 20, the senior special assistant to the President on media and publicity, office of the Vice President, Laolu Akande said that in a bid to ensure that the cost of living does not rise for Nigerians because of the changes in the Value-Added Tax, several basic food items, locally manufactured sanitary towels, pads and tuition relating to nursery, primary, secondary and tertiary education have been added to the exemption list of goods and services on the VAT under the Finance Bill 2019.
“To allay fears that low-income persons and companies will be marginalized by the new law, reduce the burden of taxation on vulnerable segments, and promote equitable taxation, the Finance Act 2019 has extended the list of goods and services exempted from VAT. The additional exemptions include the following:
“Basic food items – Additives (honey), bread, cereals, cooking oils, culinary herbs, fish, flour and starch, fruits (fresh or dried), live or raw meat and poultry, milk, nuts, pulses, roots, salt, vegetables, water (natural water and table water), Locally manufactured sanitary towels, pads or tampons.
“Services rendered by microfinance banks, Tuition relating to nursery, primary, secondary and tertiary education.”
Laolu Akande said that Nigeria’s increased new VAT rate of 7.5 percent is still the lowest in Africa, and one of the lowest anywhere in the world.
According to him, South Africa VAT is 15 percent; Ghana is 12.5 percent; Kenya is 16 percent; Egypt is 14 percent; Rwanda is 18 percent and Senegal is 18 percent.
The Presidential spokesman listed the benefit of the new law to include consolidating the efforts already made in creating the enabling environment for improved private sector participation and contribution to the economy as well as boost states’ revenues.
He quoted President Buhari as saying that the Finance Bill will support the funding and implementation of the 2020 Budget, adding: “We shall sustain this tradition by ensuring that subsequent budgets are also accompanied by a Finance Bill.”
“To allay fears that low-income persons and companies will be marginalized by the new law, reduce the burden of taxation on vulnerable segments, and promote equitable taxation, the Finance Act 2019 has extended the list of goods and services exempted from VAT. The additional exemptions include the following:
“Basic food items – Additives (honey), bread, cereals, cooking oils, culinary herbs, fish, flour and starch, fruits (fresh or dried), live or raw meat and poultry, milk, nuts, pulses, roots, salt, vegetables, water (natural water and table water), Locally manufactured sanitary towels, pads or tampons.
“Services rendered by microfinance banks, Tuition relating to nursery, primary, secondary and tertiary education.”
Laolu Akande said that Nigeria’s increased new VAT rate of 7.5 percent is still the lowest in Africa, and one of the lowest anywhere in the world.
According to him, South Africa VAT is 15 percent; Ghana is 12.5 percent; Kenya is 16 percent; Egypt is 14 percent; Rwanda is 18 percent and Senegal is 18 percent.
The Presidential spokesman listed the benefit of the new law to include consolidating the efforts already made in creating the enabling environment for improved private sector participation and contribution to the economy as well as boost states’ revenues.
He quoted President Buhari as saying that the Finance Bill will support the funding and implementation of the 2020 Budget, adding: “We shall sustain this tradition by ensuring that subsequent budgets are also accompanied by a Finance Bill.”
