Uche Usim, Abuja
Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed on Thursday disclosed that the implementation of the 7.5% Value Added Tax (VAT) commences February 1, 2020, as all the necessary administrative procedures, especially the gazette of the Act by the Federal Ministry of Justice, would have been completed.
The Accountant-General of the Federation, Mr Ahmed Idris told finance journalists that his office has commenced implementation, since the bill has been signed into law by President Muhammadu Buhari.
While the Minister reckons that the new finance document has become a law that should take effect immediately, she however noted that there were certain administrative procedures and formalities to be finalised before commencement.
Recall the VAT increase which is meant to help government achieve its revenue projections for the 2020 Budget (N8.155trillion) is a part of the tax reforms included in the 2019 Finance Act. With the Act, there will be more revenue to finance key government projects especially in the areas of health, education and critical infrastructure.
Among the Finance Act strategic objectives is the supporting of micro, small and medium Enterprises (MSMEs) in line with the ease of doing business reforms such as VAT threshold.
She said: “We planned that, going forward, the annual budget will always be accompanied by Finance Bills to enable the realisation of revenue projections.
“Future Finance Bills will therefore also provide us with additional opportunities to incrementally improve the fiscal policy and regulatory/legal environment in order to further strengthen our domestic capital market, and ultimately ensure sustained and inclusive growth and development.”
The Finance Act also takes care of essential palliatives to support MSMEs and mitigate the impact of the VAT rate increase on the most vulnerable businesses, communities and citizens in the economy.