Business
VAT: Nigerians to cough out more for consumption of luxury goods
Faced with the challenge of boosting internal revenue for its various development programmes the Federal Government has concluded plans to make rich Nigerians pay more for some luxury items.
To this end, the Federal Executive Council (FEC), Presided over by acting President Yemi Osinbajo, on Wednesday approved the revised National Tax Policy.
Following that decision, Value Added Tax on luxury items like champagne will now increase from the current five per cent, among other changes.
The disclosures were made by the Minister of Finance, Mrs. Kemi Adeosun, while addressing State House correspondents after the meeting.
Announcing the revised National Tax Policy, Adeosun disclosed that while its implementation would take immediate effect, some areas of the policy which required legal adjustment would be referred to the National Assembly for action.
According to Mrs. Adeosun, Nigeria remains one of the countries with the lowest Gross Domestic Product tax ratio in the world.
Read also: SEC slams life ban on Okumagba, Edozie, BGL over N6bn fraud
“What the committee has shown is that we should look at actually increasing VAT on some luxury items. With VAT of five per cent, we have the lowest VAT. While we don’t think VAT should be increased on basic items, if you are going to drink champagne in the United Kingdom, the VAT is 20 per cent; so, why should it be five per cent in Nigeria?
“So, they have made recommendations that we should pull out some luxury items and increase VAT on those items immediately. And I think that is a very valid and sensible suggestion, which we are going to talk to the National Assembly about to see how we can implement it.
“But as far as basic goods are concerned, no. I believe it is only fair that when you consume luxury goods, you should pay a little bit more. The National Assembly will decide the percentage,” she said.
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Margret Dickson
February 2, 2017 at 12:49 pm
This is a smart decision, nightclubs and parties are making huge money from purchase of luxury drinks. since the VAT will now increase, the government will get more revenues from luxury goods, for once, Kemi made wise decision and she’s absolutely right
Roland Uchendu Pele
February 2, 2017 at 5:06 pm
Well, it is smart to you because you don’t think the more these organisations make every night is the more they pare their bills and staff’s salaries. Think well, please.
Animashaun Ayodeji
February 2, 2017 at 12:51 pm
I think the VAT increment should not be limited to champagne alone, it should be on all alcohol generally. This will not only boost revenue, it will also curb excess drinking in the society. This is a policy that will tackle two issues
Balarabe musa
February 2, 2017 at 2:13 pm
Yes , drinking alcohol is a sin and it is also a cause of social vices in the society. Both the poor and the rich should be heavily taxed on buying alcoholic drinks so stop the acts of being drunk.
yanju omotodun
February 2, 2017 at 1:06 pm
I dont know if I am to commend the government for this laudable or unlaudable policy. But all same, let see how it will generate income for the country internally as they said.
JOHNSON PETER
February 2, 2017 at 3:40 pm
Champagne is imported , so that may even stop its avalanche importation and thereby the rich could be forced to patronise wines manufactured in Nigeria and definitely that will boost our IGR. It is a laudable policy. Kudos the economy team.