Thursday, 2 February 2017

FG inaugurate Panel over High Price of Food, Set To Increase VAT on luxury items

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 Worried about the cost of food items all over the country, Federal Government inaugurate inter-ministerial task force to force down food prices as well as raise Value Added Tax (VAT) on luxury items.
Briefing State House Correspondents, yesterday, Finance Minister, Kemi Adeosun, said the Federal Executive Council (FEC) meeting, presided over by acting President, Prof. Yemi Osinbajo, approved a revised national tax policy.

Members of the task force are Minister of Agriculture and Rural Development, Chief Audu Ogbeh, Minister of Finance, Mrs Kemi Adeosun, Minister of Industry, Trade Development, Dr. Okey Enelamah, Minister of Transportation, Rotimi Amaechi, Minister for Water Resources, Suleiman Adamu, Minister of Labour and Employment, Dr. Chris Ngige.

The office of the Chief of Staff to the President and the Senior Special Assistant to the President on Sustainable Development Goals, (SDGs), would also be on the task force.
Earlier, Adeosun stressed that the main thrust of the new tax policy is to establish fundamental principles to guide and orderly development of the Nigerian tax system towards meeting is objectives.

Nigerians currently pay five percent VAT, introduced in 1994, by the military.
In the proposed new policy, consumers of luxury goods will have to pay a higher VAT.
The percentage, she reiterated, is subject to the approval of the National Assembly.
The new National Tax Policy, which is a revised edition of the 2012 edition, is expected to capture all existing taxes in the country.

“What the committee report has shown is that we should look at actually increasing VAT on some luxury items. At five percent, we have the lowest VAT and whilst we don’t think VAT should be increased on basic items, if you are going to drink champagne, for instance, in the UK, you drink Champagne, 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 take to the National Assembly to see how we can implement it. But, as far as basic goods are concerned, no there will be no tax increase. 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”.

According to Adeosun, who briefed newsmen alongside Minister of Information, Culture and Tourism, Alhaji Lai Mohammed and Minister of State for Transportation, Hadi Sirika,  the new policy is expected to guide the operation and review of the tax system; provide the basis for future tax legislation and administration; provide clarity on the roles and responsibilities of stakeholders and standard benchmark on which they will be held accountable. The new policy also states the responsibilities of stakeholders which include taxpayers, the government, revenue agencies, professional bodies, tax practitioners, consultants and agents and the media and civil society.

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