FG excludes food items, others from VAT

The federal government has excluded basic food items, sanitary towels, pads, and tuition fees from elementary schools to tertiary institutions from the payment of value added tax (VAT),

The new Finance Act 2019 is set to take effect from February 1.

The government listed such food items on which no VAT is required as: additives (honey), bread, cereals, cooking oils, culinary herbs, fish, flour and starch.

Others are: fruits (fresh or dried), live or raw meat and poultry, milk, nuts, pulses, roots, salt, vegetables and water (natural water and table water).

A statement by Vice-President Yemi Osinbajo’s spokesman, Mr. Laolu Akande, said the Act would among others, consolidate on “efforts already made in creating the enabling environment for improved private sector participation and contribution to the economy as well as boost states’ revenues.”

According to Akande, contrary to fears that low-income earners and companies would be marginalised by the Act, it rather reduced the burden of taxation on vulnerable groups, promote equitable taxation and extended the list of goods and services hitherto exempted from the amended Act.

He highlighted such services exempted from VAT to include those rendered by microfinance banks, with claims that the new VAT rate increase of 7.5 per cent from the former five percent remains the lowest in Africa, and one of the lowest anywhere in the world.

He also listed VAT rates in some African countries such as South Africa (15 percent), Ghana (12.5 per cent), Kenya (16 per cent, Egypt (14 percent), Rwanda (18 percent) and Senegal (18 percent).

Akande also said the new Finance Act exempts businesses with the turnover below N25 million from the payment of VAT and Companies’ Income Tax (CIT), emphasising that companies with less than N25 million annual turnover will not pay CIT.

Leave a Reply

Your email address will not be published. Required fields are marked *

*

x

Check Also

PDP targets Ondo election as Atiku incites voters to dump godfathers

After winning by a wide margin in Edo State, the Peoples Democratic Party (PDP) has now set its sights on wresting power from the All Progressives Congress in the Ondo election 10 October.