Buhari Finance Minister Asks Tibubu Govt To Raise VAT To 10%, Says Buhari Will End Subsidy By May 29

  • The Minister for Finance, Budget and Planning is asking the incoming government to raise the VAT to 10 per cent.
  • The minister said the increase would stimulate economic growth instead of the current 7.5 per cent.
  • The minister also said that President Buhari would remove the petrol subsidy by May 29, 2023

The Minister of Finance, Budget and National Planning, Zainab Ahmed, has asked the next government to raise VAT from 7.5% to 10% to simulate the country’s economic growth.

Ahmed disclosed this during a visit to the Voice of Nigeria headquarters in Abuja.

Zainab Ahmed, Minister of Finance Credit: Bloomberg / Contributor
Source: Getty Images

VAT to stimulate economic growth

She said:

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“VAT was one of the ways to increase revenue and we still need to increase VAT because at 7.5 percent, Nigeria has the lowest VAT rate in the world, not in Africa, in the world. In sub-Saharan Africa, the African average 18 per cent. When you increase your VAT, your gross domestic product (GDP) will grow.”

According to the minister, the government had used finance bills to plug leakages and strengthen the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service. The federal government has automated two institutions through the process, she said.

Buhari to remove petrol subsidy by May 29, 2023

She said the Nigerian government would remove the controversial petrol subsidy before Buhari leaves office on May 29, 2023.

Daily Trust reported that she attributed the delay in removing the petrol subsidy in the Petroleum Industry Act (PIA) 2021 to the 2023 general elections and population and housing census.

Ahmed attributed the delay in removing the subsidy, as stipulated in the Petroleum Industry Act (PIA) 2021, to the 2023 general elections and the upcoming national census.

Ahmed stated that the cost of subsidy per liter of petrol is between N350 and N400, and said Nigeria spends about N250 billion monthly on petrol subsidy.

According to the minister, the removal of subsidy was a challenging political and economic decision for the Buhari government.

She said the removal of subsidy is almost a consensus decision in Nigeria. People now believe that subsidies do not serve the people they were meant to help and that their high costs burden the government with disproportionate public deficits.

Ghana removes fuel subsidy as Nigeria sets June date to end subsidy

Legit.ng reported that the Ghana Petroleum Authority (NPA) has announced that it has stopped subsidy for petrol in the country.

The removal of subsidies is part of Ghana’s implemented regulatory steps to ensure stability across its downstream sector.

The Ghana Executive Director of NPA, Abdul Hamid, disclosed the information in South Africa at the ongoing Africa Refiners and Distributors Week 2023.

Source: Legit.ng

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