The Federal Executive Council on Wednesday approved the revised National Tax Policy. This will bring about a raise on Value Added Tax on luxury items, like champagne, increasing from the current five per cent, among other changes.
The Minister of Finance, Mrs. Kemi Adeosun, made this known to State House correspondents at the end of a meeting of the council presided over by Acting President Yemi Osinbajo.
“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.”