The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has refuted reports suggesting an increase in the Value-Added Tax (VAT) rate from 7.5% to 10%.
In a statement on Monday, Edun clarified that the VAT rate remains at 7.5%, as stipulated by the nation’s tax laws.
“The current VAT rate is 7.5%, and this is what the government is charging on a spectrum of goods and services to which the tax is applicable. Neither the Federal Government nor any of its agencies will act contrary to what our laws stipulate,” Edun affirmed.
He further explained that Nigeria’s tax framework is built on three key pillars—tax policy, tax laws, and tax administration.
“The tax system stands on a tripod—tax policy, tax laws, and tax administration. All three must work together to ensure a sound system that strengthens the government’s fiscal position,” he added.
Edun’s statement comes in the wake of widespread criticism that followed reports of the proposed VAT hike.
Several organizations, political opponents, and Nigerians at large voiced concerns over the possibility of increasing the VAT rate from 7.5% to 10%.
Critics argued that such a move would exacerbate the country’s economic challenges and further strain citizens already struggling with rising inflation, high costs of living, and stagnant wages.
Business leaders warned that the hike would negatively impact the private sector, increasing production costs and potentially leading to job losses, while opposition parties accused the government of being out of touch with the plight of ordinary Nigerians.
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Former Vice President Atiku Abubakar was one of the prominent voices who spoke out against the rumoured VAT increase.
In a post on his official X (formerly Twitter) account on Sunday, Atiku expressed deep concern over the impact of such a policy. “This proposed increase would further strain the financial stability of Nigerians, many of whom are already struggling with high inflation and stagnant wages,” he said.
He also accused the Tinubu-led administration of being “profoundly insensitive” to the struggles of ordinary citizens by engaging in unnecessary luxury spending while considering policies that could burden the poor even further.
Edun’s clarification aimed to dispel these concerns, stating that the government remains committed to creating a tax system that balances the needs of the economy and the well-being of citizens.
“For emphasis, VAT remains at 7.5%, and that is what will be charged on all VAT-able goods and services,” he concluded, attempting to reassure the public that no changes to the tax rate were in motion.
