By Danladi Al-Hassan
President Muhammadu Buhari has signed the Finance Bill, 2020 into law effectively raising the Value Added Tax (VAT) to 7.5 percent.
The new rate according to the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, is expected to take effect in the first quarter of 2020.
President Buhari assented to the bill barely a month after its passage by the National Assembly and subsequent forwarding by the legislature to the President for assent.
In a statement by the Special Adviser to the President, Media and Publicity, Chief Femi Adesina on Monday, with the assent, there will be more revenue to finance key government projects especially in the areas of health, education and critical infrastructure.
The President had earlier announced the signing of the law personally through his verified Twitter handle @MBuhari.
“I am pleased to announce that this morning I signed into Law the Finance Bill, 2019. — Muhammadu Buhari (@MBuhari) January 13, 2020.
He said, “The Finance Bill, 2019 (the Bill), presented by President Muhammadu Buhari alongside the 2020 Appropriation Bill to a joint session of the National Assembly on 8 October 2019, was passed by both the Senate and the House of Representatives.
“The law seeks to amend 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. ”
With the Finance Law, Nigerians who want to open or maintain accounts with the Deposit Money Banks will not have to provide their Tax Identification Number to do so.”
The Federal Government has also raised the threshold from which stamp duty will be charged for online transactions from the current N1,000 to N10,000.”
The Federal Government attempted to increase the VAT rate to 10 per cent in 2007, but this was faced with stiff opposition resulting in the suspension of the proposed increase.