/Finance Law: Govt begins implementation of 7.5 per cent VAT
Finance Law: Govt begins implementation of 7.5 per cent VAT

Finance Law: Govt begins implementation of 7.5 per cent VAT

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The implementation of the 7.5 per cent Value Added Tax, VAT, on government transactions has begun following the signing of the Finance Bill into law.

The Accountant-General of the Federation, Alhaji Ahmed Idris, made this known on Wednesday in Abuja.

Speaking with journalists, he said it must be known that payment of VAT at 7.5 per cent was compulsory for businesses done with government even before the signing of the bill into law.

He said because tax was deducted at the point of payment and not purchase, any payment made after the signing of the bill would attract Value Added Tax of 7.5 per cent.

His words: “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, 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.”