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.
“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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