FG plans to raise VAT to 7.5 percent next year – Ahmed

Ex-finance Minister, Zainab Ahmed has disclosed that the Federal  Government has plans to raise value-added tax (VAT) to 7.5 by 2020 from the present 5 percent.

Ahmed who said this on Tuesday while speaking on the sidelines of the ongoing Bloomberg Emerging and Frontier Forum in London, noted that it would help the federal government improve revenue generation.

“We have developed a strategic revenue growth initiative, which we have started implementing,” Ahmed said.

“Our target is to increase revenue to 65 per cent minimum in 2019 so that in the next three years, we are able to attain 80-85 per cent of our revenue target.

“We are looking at adding value-added tax from 5 percent to 7.5 percent. 5 percent is one of the lowest VAT globally. The increase will not be done overnight but hopefully, by the next budget (2020), the new increase will take effect.

“We recently increased the minimum wage and one of the agreements we had with labour was that there would be some marginal increase on VAT to enable us to handle the incremental cost of increasing wages.”

The former minister pointed out that she would like to be reappointed as minister of finance, but that he doesn’t know whether he was returning as minister or not.

She also revealed that the federal government plans to issue green bonds every year.

“The president is in the process of putting together a new cabinet. I have not had a discussion with him on whether I am coming back on the cabinet or not,” she said.

“I would like to go back to the cabinet in the same role to continue the work that we started.

“I was only there for nine months, I started a lot of initiatives that I would love to push.”