COVID 19: VAT reduction is not ideal – PTF Chairman

The Secretary to the Government of Nigerian Federation who doubles as the Chairman of the Presidential Task Force (PTF) on COVID-19, Boss Mustapha while answering questions during the PTF daily COVID-19 media briefing on Friday, 1 May 2020, said that a reduction in the rate of Value Added Tax (VAT) as a result of COVID-19 pandemic will not be ideal. He said that VAT, (which rate was increased in February 2020 with the introduction of the Finance Act 2019) being a component of revenues into the Consolidated Revenue Fund of the Government, is meant to compensate for the downturn currently being experienced on the earnings from oil. He added that Government must derive revenue to be able to meet its obligations on overheads and personnel costs.

The SGF went further to highlight the sharing formula for the VAT revenue as follows:

15% – Federal Government

85% – State & Local Governments.

Moreover, the PTF Chair mentioned that most essential & basic consumables have been exempted from VAT. He added that a reduction in VAT rate at this period might lead to a crisis.

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