FG Introduces 15% VAT on Luxury Goods

The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has confirmed that the federal government would impose 15 percent Value Added Tax (VAT) on luxury goods, adding that total subsidy removal became effective last month.

Fielding investors’ questions at a meeting on the sidelines of the on-going IMF/World bank Annual Meetings in Washington DC, he said that a bill before the National Assembly would bring about a situation where rich Nigerians would pay VAT rate that would increase over time to 15 percent.

He clarified, however, that the poor and vulnerable will pay less or zero VAT on essential goods.

According to him, the list of such essential goods that would attract zero VAT would be made available to the public in due course.

His words: “In terms of VAT, the commitment of President Bola Tinubu is that while implementing difficult and wide-ranging but necessary reforms, the poorest and most vulnerable will be protected.

Edun was optimistic that the oil sector was set to increase the accretion of foreign exchange (FX) into the market, as according to him, oil production was being ramped up with better security in the oil-producing areas and new investments, especially those announced by Total and ExxonMobil.

He also said that total removal of fuel subsidy became effective in September 2024.