New VAT Rate Kicks Off From 1st Of February – FG

The Federal Government, through the Minister of Finance, had announced that the new vat rate will be effective starting from Saturday 1st February 2020.
The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed made the announcement, noting that that the increased Value Added Tax (VAT) from 5 to 7.5 has made provisions to improve the ease of doing business. Zainab added that the category of companies that have a turnover of 25% and below will not be paying taxes at all and the taxes for companies with 25-100 million turnover will be paying reduced taxes.
“I want to state that one of the key provisions in the finance act 2019 that have elicited a lot of interest is the increase in the VAT from 5% to 7.5%, and to remind us all, the finance bill has made copious provisions to improve the ease of doing business; so we have a category of companies that have turnover of 25% and below that will be paying no taxes at all, and also we have reduced tax rates for companies that have turnover from 25 million to 100 million from 30% to 30%.
Read also: Minimum Wage: We Are Committed To Paying But Taxes Have To Increase – Oyetola Tells Osun Workers
The essence of this is to encourage formalization of businesses from the informal sector and also to encourage businesses to grow and become more productive, thereby increasing employment and also meeting the commitment of Mr. President to remove 100 million Nigerians out of poverty over the next 10 years. The effective date for the VAT increase from 5-7.5% will be the 1st of February 2020.“Photos Credit: Getty