Breaking... Nigeria's VAT is now 7.5% - aksu360

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Breaking... Nigeria's VAT is now 7.5%

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Nigeria's President, Major General Muhammadu Buhari (retd.) has signed the 2019 Finance Bill into law. The law heralds a new regime of Value Added Tax rate of 7.5%, up from 5%.

The new law has also amended the Petroleum Profit Tax Act, Customs and Excise Tariff Act, Company Income Tax Act, Personal Income Tax Act, Value Added Tax, Stamp Duties Act and the Capital Gains Tax.

The finance bill provides several revenue windows for the Federal Government to source funds, especially for the immediate financing of the 2020 budget. The country’s budget for the year is N10.59tn, with a huge deficit of over N2tn.

The Federal Executive Council had approved 7.2% new VAT rate on 10/09/2019, while Buhari presented the Finance Bill to the National Assembly on October 8 along with the 2020 Appropriation Bill.

The National Assembly eventually passed an amended version of 7.5% as contained in the finance bill before lawmakers proceeded on the Christmas and New Year break. Both have now become Acts of the National Assembly, the President having given assent to them.

For the VAT, the Federal Government had explained the urgency to increase it, saying that it would also provide more funds to the 36 states and the 774 local government councils to enable them to meet pressing financial needs, especially the payment of the new minimum wage of N30,000.

Another provision of the new law is that the threshold on which stamp duty will be charged on online transactions has been raised to N10, 000 from N1, 000.

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