Update: 7.5 Percent VAT Kicks Off As Buhari Signs Finance Bill

The Value Added Tax (VAT) goes from five per cent to 7.5 per cent following President Muhammadu Buhari’s signing of the 2020 Finance Bill.

Ekohotblog recalls Buhari signed the Bill on Monday.

But the implementation will be delayed till the new law is gazetted. It is not clear how soon this will be done.

The Financial Act is an amendment to seven extant fiscal laws, which are: the Petroleum Profit Tax Act, the Customs and Excise Tariff Act, the Company Income Tax Act, the Personal Income Tax Act, the Value Added Tax, the Stamp Duties Act and the Capital Gains Tax.

President Buhari said the Act has five strategic objectives, in terms of achieving incremental, but necessary, changes to the fiscal laws.

“These objectives are: Promoting fiscal equity by mitigating instances of regressive taxation; Reforming domestic tax laws to align with global best practices; Introducing tax incentives for investments in infrastructure and capital markets; Supporting Micro, Small and Medium-sized businesses in line with our Ease of Doing Business Reforms; and Raising Revenue for Government.

The new law is expected to make more revenue available to finance key government projects in health, education and critical infrastructure.

One of the features of the new law is that those who want to open or maintain accounts with banks will provide their Tax Identification Number (TIN).