Anna Okon
Banks, shipping companies, the Nigeria Customs Service and agencies that offer services requiring the Value Added Tax, adjusted their rates on Saturday to reflect the new VAT rate of 7.5 per cent.
On Friday, First Bank sent a message to its customers stating, “Further to the enactment of the Finance Act 2019, the Federal Government has announced that the implementation of the 7.5 per cent Value Added Tax rate under the new Finance Act will commence on February 1, 2020.
“In line with the Federal Government’s directives, please be informed that VAT on each eligible bank transaction or service will be charged at the new rate of 7.5 per cent with effect from February 1, 2020.”
Also, any Customs service requiring the payment of VAT has been adjusted to reflect the new rate.
A freight forwarder, Sunny Nnebe, confirmed the rate adjustment to our correspondent.
He said, “The VAT rates on all the services in the port have been adjusted. Not just for Customs but other agencies that offer services with VAT attached.
In an advisory note to its clients, French shipping line, CMA-CGM, also indicated that its VAT rate would be adjusted from February 1 in compliance with the Federal Government’s directive.
The President, Major General Muhammadu Buhari (retd.), on January 13, signed the Finance Bill into law, specifying an increase in VAT rate from five per cent to 7.5 per cent, among other provisions.
Although stakeholders had predicted that it would make life tougher for Nigerians, they also reasoned that other provisions in the bill that introduced tax incentives for Small and Medium Enterprises would ensure ease of doing business.
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The Director General, Nigeria Employers’ Consultative Association, Dr Timothy Olawale, said to justify the new rate, there should be a judicious use of the resources generated, which according to him, would amount to N500bn annually.
He advised the government to block leakages and also reduce cost of governance.
“Several unnecessary aides kept at prohibitive cost are needless,” he said.
He also advised that attention should be paid to the critical sector of the economy by creating an enabling environment for them to thrive.
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