By; Sunday Ode, Abuja.
The Federal Government on Wednesday approved a new tax policy that is aimed at increasing the Value Added Tax (VAT) from five percent to a higher percentage.
Minister of Finance, Kemi Adeosun who disclosedthis at a press briefing after the weekly meeting of the Federal Executive Council (FEC) said only luxury items would be on the increase list.
According to her, the five percent VAT being charged in the country is unrealistic as it is about the lowest anywhere in the world.
She said, however that the increased percentage to be charged would be decided by the National Assembly, adding that the process would require amendment of some existing legislation by the lawmakers.
“We should look at actually increasing VAT on some luxury items. VAT of five percent we have the lowest VAT and whilst we don’t think VAT should be increased on basic items, if you are going to drink champagne you drink Champagne in the UK and VAT is 20% why should it be 5% in Nigeria.
“So we should pull out some luxury items and increase VAT on those items immediately. And I think that is a very valid and sensible suggestion which we are going to talk to the National Assembly to see how we can implement it.
“But as far as basic goods are concerned, no. I believe it is only fair that when you consume luxury goods you should pay a little bit more.
“The National Assembly will decide the percentage,” she said.
Also council approved the procurement ot coaches for the improvement of Kaduna airport as the Aviation Ministry prepares to shut down Abuja airport for maintenance purpose.
Minister of State for Aviation, Hadi Sirika, who disclosed this who disclosed this after the FEC meeting said the measure is to help the nation’s aviation industry improve on the handling of passengers especially during the Abuja airport closure.
He said: “Two memoranda were approved in the ministry of transport. One is the procurement of coaches two first class coaches, two are for baggage and six for long distance economy class coaches, to improve upon this Kaduna airport project.
“This is to boost rail transportation on the Abuja Kaduna standard gauge railway to improve on passengers and good and also following the impending closure of the Abuja airport.
“This to also compliment the other airport we are doing in Kaduna. This is to increase our capacity to handle passengers during this airport closure.”