FG Imposes 7.5% VAT On Business Done Before Law Was Signed

The Federal Government said on Wednesday that it has begun the implementation of some aspects of the Finance Act, with specific reference to the 7.5 per cent Value Added Tax on government transactions.

The Accountant-General of the Federation, Alhaji Ahmed Idris, disclosed this on Monday in Abuja when he spoke with newsmen.

According to Ahmed, the confirmation became necessary because some Nigerians transacting business with the government were still paying the old VAT rate of 5%.

Ahmed said Nigerians should be aware that payment of VAT at 7.5 per cent was a must even for businesses done with government before President Muhammadu Buhari signed the Finance Act into law.

When asked if it was right to impose VAT of 7.5 per cent on a business transaction that had already been done before the signing of the finance bill, he said VAT was deducted at the point of payment rather than the point of purchase.

Read Also: VAT hike will kill businesses, shrink GDP – Experts

Ahmed said: “You cannot implement a budget unless National Assembly passes it and Mr. President signs it.

“So the decision to increase VAT was debated and members of the public were sensitised and nobody can start deducting that VAT unless the bill is signed.

“Just yesterday (Tuesday), I saw a payment which was done last year in December and when I checked the payment, the VAT on it was five per cent and I said no, it must be 7.5 per cent because the five per cent VAT has been overtaken by events because that is the law as of today.

“So I stopped it and asked them to go and recharge 7.5 per cent.

“You cannot implement something unless you have the instrument whether administrative or legal for it to be implemented.”

  1. Applyn tax in retrospect? Haba…

19th June 2024
Nigerian Pantagraph