Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, has announced that the federal government intends to raise the Value Added Tax (VAT) on luxury goods to 15%.
During an investor meeting at the ongoing IMF/World Bank Annual Meetings in Washington, Edun detailed that a bill currently being reviewed by the National Assembly seeks to gradually implement this VAT increase for luxury items, while ensuring that essential goods for vulnerable Nigerians remain either exempt or taxed at a zero rate.
“President Bola Tinubu is committed to ensuring that while we implement necessary reforms, the poorest and most vulnerable will be protected,” Edun stated. “The legislation progressing through the National Assembly will increase VAT for luxury goods targeted at wealthier individuals, while essential items used by low-income and average citizens will be exempted or subject to a zero rate.”
He also mentioned that a list of essential goods exempt from VAT will be shared with the public soon.
In addition, Edun expressed optimism about Nigeria’s oil sector, noting improved security in oil-producing regions and new investments from companies like Total and ExxonMobil. He believes these factors will enhance oil production and foreign exchange inflows.
Regarding the removal of fuel subsidies, Edun explained that while reforms were announced earlier, full implementation only began last month. He stressed that the savings from this subsidy removal would soon have a more significant impact on the economy.
When asked about Nigeria’s financial strategy, Edun revealed that the government had chosen to issue domestic dollar bonds despite the IMF’s recommendations against it. He assured that Nigeria values its relationship with the IMF but maintains its independence in financial decision-making.
