The Federal Executive Council (FEC), presided over by President Muhammadu Buhari has approved a two percent increase in Value Added Tax (VAT) to move it from five to seven percent, The Sun reports.
Minister of Finance, Budget and National Planning, Zainab Ahmed, made this disclosure while briefing State House Correspondents at the end of the meeting which started at 11 a.m and ended at 6:12 p.m.
Ahmed, however, said the implementation will not start until the approval by the National Assembly after the VAT Act is amended.
The council directed immediate consultations with states, local governments, and other relevant stakeholders before it will take effect in 2020.
Recall that in June this year, THISDAY reported that Mrs. Ahmed said that the Federal Government was planning to increase the rate of value-added tax (VAT) to 7.5 percent from the current five percent by 2020.
This is as the government seeks to shore up falling revenue.
Speaking at the Bloomberg Emerging & Frontier Forum in London, the former minister, whose tenure ended with President Muhammadu Buhari’s first term on May 29, said that her main preoccupation while in office was how to raise government’s revenue with only 55 percent of targets being met.
She said: “We have developed a strategic revenue growth initiative, which we have started to implement.
“Our target is to increase revenue to 65 percent minimum in 2019 so that in the next three years we are able to attain 80-85 percent of our revenue target.”
However, earlier plans by the government to increase VAT had been vehemently opposed by Nigerians.
