Thursday, 2 February 2017

FG to raise VAT on champagne, other luxury items

The Federal Executive Council on Wednesday approved the revised National Tax Policy.The policy will see the Value Added Tax on luxury items, like champagne, increasing from the current five per cent, among other changes. .
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The Minister of Finance, Mrs. Kemi Adeosun, disclosed this to State House correspondents at the end of a meeting of the council presided over by Acting President Yemi Osinbajo.She was joined at the press conference by the Minister of Information and Culture, Alhaji Lai Mohammed; and the Minister of State, Aviation, Hadi Sirika. .
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The administration of former President Goodluck Jonathan had in 2014, while unveiling its austerity measures, identified some items that were to be taxed as luxury goods to include champagne, alcoholic beverages, private jets, luxury cars based on engine capacity, and yachts. .
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It had estimated to generate about N480bn from taxes on luxury items in the 2015 fiscal period.Adeosun said while the implementation of the revised policy would take immediate effect, some aspects that required changes in law would be referred to the National Assembly for action. .
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She said Nigeria was one of the countries with the lowest Gross Domestic Product tax ratio in the world, adding that non-payment of tax was one of the biggest factors that contributed to the nation's current economic situation, hence the need for the revised policy. .
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In implementing the new policy, the minister said the government would attempt to reduce the number of taxes with emphasis on indirect taxes, as well as centralising tax administration where possible.

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