In an effort to shore up the federal
government’s revenue base, the Federal Executive Council (FEC) yesterday
approved a new tax regime, just as it announced its intention to raise
taxes on luxury goods.
Also the council constituted a task force to device measures to force down the prices of food in the country.
The council equally approved a memo for
the procurement of more coaches for the Nigerian Railway Corporation
(NRC) to improve rail transportation.
Minister for Finance, Mrs. Kemi Adeosun,
who announced the approval of the new tax policy, after the FEC meeting
presided over by acting President Yemi Osinbajo, said council approved
the revised National Tax Policy meant to review the tax rates in certain
areas.
She however pointed out that the
government would work with the National Assembly for the amendment of
certain tax laws before the commencement of the policy.
Adeosun hinted that while taxes on some
basic commodities might not be increased, taxes on luxury goods would
certainly be increased.
Asked if the council made any decision
on reviewing the rate of value added tax (VAT), the finance minister
said: “What the committee has shown is that we should look at actually
increasing VAT on some luxury items.
“At five per cent, we have the lowest
VAT among our peers and whilst we don’t think VAT should be increased on
basic items, if you are going to drink Champagne, for instance, you
should pay more.
“Champagne in the UK attracts VAT of 20 per cent, so why should it be five per cent in Nigeria?
“So, they have made recommendations that we should identify some luxury items and increase VAT on those items immediately.
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