Finance Minister and Coordinating Minister of the Economy, Mr. Wale Edun, has announced that the federal government will impose a 15 percent Value Added Tax (VAT) on luxury goods, noting that the full removal of fuel subsidies took effect in September 2024.

Speaking at the IMF/World Bank Annual Meetings in Washington DC, he explained that a bill before the National Assembly proposes a tiered VAT approach, with wealthy Nigerians paying an increased VAT rate on luxury items, eventually reaching 15 percent. However, Edun clarified that essential goods for the “poor and vulnerable will pay less or zero VAT,” with the list of these exempt items to be publicly shared.

He added, “The commitment of President Bola Tinubu is that while implementing difficult and wide-ranging but necessary reforms, the poorest and most vulnerable will be protected.” He continued, “the bills going through the National Assembly in terms of VAT will raise VAT for the wealthy on luxury goods while at the same time seeking to exempt or seek a zero rate for the essentials and for what the poor and the average persons will purchase.”

On the foreign exchange front, Edun expressed optimism, citing efforts to increase oil production and secure oil-producing areas, alongside new investments by Total and ExxonMobil, as measures to boost foreign exchange inflows.