The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, confirmed that the federal government will implement a 15 percent Value Added Tax (VAT) on luxury goods, noting that the full subsidy removal took effect last month.
At an investor meeting during the IMF/World Bank Annual Meetings in Washington, DC, Edun shared that a bill before the National Assembly aims to progressively raise the VAT rate on luxury items to 15 percent, targeting wealthy Nigerians.
He clarified that essential goods for the poor and vulnerable would have minimal or no VAT, with a list of exempt items to be released soon. Edun stated, “President Bola Tinubu’s commitment is to protect the poorest and most vulnerable while enacting necessary reforms. The VAT changes aim to apply a higher rate to luxury goods, while keeping essentials at zero or reduced rates.”
Edun expressed optimism about increased foreign exchange inflows from the oil sector, as security improvements in oil-producing areas and new investments, particularly by Total and ExxonMobil, support higher oil production.
