Nigerian Government to Impose Zero-Rated Tax on Food Items, Plans VAT Increase
Abuja, Nigeria – The Nigerian government, through the Presidential Committee on Fiscal Policy and Tax Reforms, has announced its plan to implement a zero-rated tax on food items, a move aimed at easing the financial burden on the nation’s most vulnerable citizens. This was disclosed by the Committee Chairman, Taiwo Oyedele, during a broadcast on Channels Television.
Oyedele explained that the current Value Added Tax (VAT) system has been placing an undue burden on the poorest citizens, particularly when it comes to essential food items. “Even the VAT system was placing too much burden on the poorest people. For example, you had food items, some of them were exempted,” Oyedele stated.
He further elaborated on the decision, saying, “So we’ve decided that food should not just be exempted, it should be zero-rated,” indicating that the government is moving beyond mere exemptions to completely eliminate VAT on food items.
In a related development, Oyedele also revealed that the government is preparing a bill that would raise the VAT rate from the current 7.5 percent to 10 percent. This announcement comes on the heels of significant increases in the pump price of Premium Motor Spirit (Petrol) by the Nigerian National Petroleum Company Limited, with prices rising from N617 per liter to as high as N897 and N855 in some regions.
The government’s move to zero-rate VAT on food items is seen as an attempt to mitigate the impact of these price hikes on the population, particularly those most affected by rising living costs.