2 weeks ago
1
Legit.ng journalist Victor Enengedi has over a decade's experience covering Energy, MSMEs, Technology and the Stock Market.
Nigeria’s Presidential Fiscal Policy and Tax Reforms Committee has recommended raising the Value Added Tax (VAT) on non-essential goods to compensate for the planned reduction on essential items, such as food, healthcare, and education.
The committee's chair, Taiwo Oyedele, shared this update in a post on his X account on Monday, September 9, 2024.
Source: UGC
According to Oyedele, the proposal also includes setting the VAT rate at zero per cent (0%) for food, health, and education, while exempting rent, transportation, and small businesses from the tax.
He said:
“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."He explained that businesses would receive full credit for the VAT paid on their assets and services, which would help reduce their overall expenses and curb inflation.
The proposal also includes exempting essential goods and services, such as food, rent, transportation, healthcare, and education, from VAT or applying a zero per cent rate.
This initiative aims to alleviate the tax burden on households, particularly as data from the National Bureau of Statistics (NBS) shows that a significant portion of Nigerians' income goes toward these basic necessities.
The proposed VAT reforms aim to simplify Nigeria's tax structure by eliminating other consumption taxes and focusing exclusively on VAT where applicable.
A major advantage of the reforms is that all businesses will be able to reclaim VAT on their assets and services, which will help reduce operating costs and ease inflationary pressures.
Furthermore, over 97 per cent of small and medium-sized enterprises (SMEs) will be exempt from charging VAT on their sales, providing additional relief for smaller businesses.
The reforms also pledge faster VAT refunds without requiring extensive tax audits, addressing delays in the current system.
Additionally, the committee suggests a fairer allocation of VAT revenues among states, while exports of services and intellectual property would be subject to a zero per cent VAT rate.
PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ find the “Recommended for you” block on the home page and enjoy!
Source: Legit.ng
English (US) ·