The federal government would apply a 15 percent Value Added Tax (VAT) on luxury products, according to Mr. Wale Edun, Minister of Finance and Coordinating Minister of the Economy. He also stated that the complete elimination of subsidies went into force last month.

In response to enquiries from investors during a meeting held on the margins of the ongoing IMF/World Bank Annual Meetings in Washington, DC, he stated that a law pending in the National Assembly would force wealthy Nigerians to pay a VAT rate that would eventually rise to 15%.

However, he underlined that the weak and impoverished will pay reduced or no VAT on necessities.

He stated that the public will eventually have access to the list of such necessities that would be exempt from VAT.

In his own words: “President Bola Tinubu has pledged to safeguard the poorest and most vulnerable while enacting challenging and extensive but essential reforms in the area of VAT.

In the case of VAT, it is a targeted tax that is also very effective for well-known reasons. Therefore, the VAT proposals that are currently pending in the National Assembly would increase the VAT on luxury products for the affluent while simultaneously attempting to exclude or achieve a zero rate for necessities and items that the poor and average people will buy.

“Those bills will hit luxuries with a higher rate of VAT while single items will have zero rate of VAT.”

Edun had high hopes that the oil industry would boost the amount of foreign exchange (FX) that was accumulated in the

market, as he claimed that increased security in oil-producing regions and new investments—particularly those made by Total and ExxonMobil—were boosting oil output.

Additionally, he stated that the complete elimination of gasoline subsidies took effect in September 2024.

“The full fuel subsidy only went into effect last month, so savings from it will have a greater impact on the economy moving forward,” he said.