Finance Minister Edun Confirms Plans to Increase VAT on Luxury Goods to 15%

The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has confirmed that the federal government intends to raise the Value Added Tax (VAT) to 15%, primarily targeting luxury goods.

During an investor meeting at the ongoing IMF/World Bank Annual Meetings in Washington, D.C., Mr. Edun explained that a bill currently being reviewed by the National Assembly seeks to gradually increase VAT on luxury items.

He emphasized that essential goods consumed by vulnerable Nigerians will either remain exempt or be subject to a zero rate.

“In terms of VAT, President Bola Tinubu’s commitment is that while implementing necessary reforms, the poorest and most vulnerable will be protected,” Edun said.

“The bills going through the National Assembly will raise VAT for the wealthy on luxury goods while exempting or applying a zero rate to essential items used by the poor and average citizens.”

Mr. Edun also mentioned that a list of essential goods exempt from VAT will be made public in due course.

The minister expressed optimism about Nigeria’s oil sector, highlighting improvements in security in oil-producing areas and new investments from companies like Total and ExxonMobil.

He stated that these developments would boost oil production and enhance foreign exchange inflows.

Regarding the removal of fuel subsidies, Edun explained that although subsidy reforms were announced earlier, full implementation only began last month.

He emphasized that the savings from this removal would significantly impact the economy in the coming months.

In response to questions about Nigeria’s financial strategy, Mr. Edun revealed that the government proceeded with issuing domestic dollar bonds despite the International Monetary Fund’s (IMF) advice against it.

He affirmed that while Nigeria maintains a cooperative relationship with the IMF, it retains the autonomy to make its own financial decisions.