Stella Dimoko Korkus.com: FG To Increase VAT On Champagne And Other Luxury Items

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Thursday, 2 February 2017

FG To Increase VAT On Champagne And Other Luxury Items

The federal government plans to raise the value-added tax (VAT) on luxury times — subject to the approval of the national assembly.



Briefing the media after the federal executive council meeting on Wednesday, finance minister Kemi Adeosun said the cabinet, presided over by Vice-President Yemi Osinbajo, has approved the revised national tax policy to address low taxation in the country.

Nigerians currently pay 5% VAT, one of the lowest in the world, introduced in 1994 by the military government.

According to Adeosun, “What the (review) committee report has shown is that we should look at actually increasing VAT on some luxury items. At 5% we have lowest VAT.

“And while we don’t think VAT should be increased on basic items, if you are going to drink champagne, for instance… in the UK you drink champagne the VAT is 20%, so why should it be 5% in Nigeria.

“So they have made recommendations that we should pull out some luxury items and increase VAT on those items immediately. And I think that is a very valid and sensible suggestion which we are going to take to the national assembly to see how we can implement it.

“But as far as basic goods are concerned, no there will be no tax increase. I believe it is only fair that when you consume luxury goods you should pay a little bit more. The National Assembly will decide the percentage.”

The UK case is slightly different from Nigeria – its 20% VAT is imposed on all the affected goods and services and is completely different from luxury tax.

The new national tax policy, a revised version of the 2012 edition, will capture all existing taxes.‎

The new policy, as proposed by the ministry of finance, seeks to entrench an efficient tax system and address the low tax-to-GDP ratio, which at 6% is one of the lowest in the world.

In November 2014, Ngozi Okonjo-Iweala, then finance minister, announced that private jets, yachts, champagne and a host of other the luxury goods would be specially taxed.

From Cable


*Madam Adeosun,what are you increasing tax for when there are no jobs?


24 comments:

Fab Mum said...

This federal government just want people to be miserable. That is their goal
Increase vat In luxury item indeed
Imagine them comparing Nigeria and UK. Lmao
This country is a joke
Go and generate income else where.

Miss Ess said...

Seriously! Where are we going mbok?

Rex said...

Choi! this is a big JOKE! Taxes without jobs or money in circulation..

Anonymous said...

Buhari govt always adding to Nigerians burden. Shame on those wailing change then

Yori Yori Princess Loveme Jeje said...

hahahahaha see her worwor face.

Anonymous said...

This yeye woman is just confused!! Looking to make them.. we need jobs food light water . OLUKU

Anonymous said...

See people complaining.

Dumb illiterates.

What is your business with tax on Champagne ?

So dollar should bear more burden and pressure because somebody want to pop champagne

The Observer said...

Like say Nigeria and UK na d same.
Madam since we are making comparisons : in the UK there is 24/7 light, good roads, portable water, transportation and d list goes on. Why don't u start from there? Na tax see

Anonymous said...

Nothing other than placing more burden on Nigerians. It is such a shame to this govt.

Gift [Mr] said...

Stella help me ask her oh!.. Yeye dey smell

John Edet said...

Good move I think, luxury items are not for the poor hence it wouldn't affect them directly. Abroad the more you earn the more you pay..

Anonymous said...

Indirect taxation is a standard way for government to raise revenue, I don't know if I should be shocked at your comment asking why they are increasing taxes when there are Jobs, I don't know how many jobless person who drinks champagne or consumes other luxury goods.

Very few people pay taxes in Nigeria, most do not pay the right amount….. levels of Taxation in Nigeria are too low, 5% Vat?, and we want infrastructure and economy development?

Nigeria is not the only country in recession, however Nigeria is the only country who want the government to perform magic to bring the country out of recession.

Some of the actions taken by USA and UK includes Quantitative Easing (printing money to give to bank to pump into the economy), selling government assets (shares, building, bonds, gold deposits etc.),increase in taxation of some luxury goods, borrowing etc...Nigeria government has proposed all these things and Nigerians have rejected them all, therefore while oil prices remain low, we are left with diversification and attempt to grow non-oil sector of the economy, encourage local production and limit importation of goods and services, this should help the economy, but Nigerian are not patience, they want imported rice, imported everything because they are cheaper.....importing everything does not create jobs in ABA, it also put pressure on Naira because we don't sell enough goods to other countries to earn dollars, especially when the only item we export has gone down in value, everyone importer is now looking for dollar to import items.....
SDK, it is time you come up with an alternatives if you don't want government to raise taxes, there are no magic wands......

Anonymous said...

Indirect taxation is a standard way for government to raise revenue, I don't know if I should be shocked at your comment asking why they are increasing taxes when there are Jobs, I don't know how many jobless person who drinks champagne or consumes other luxury goods.

Very few people pay taxes in Nigeria, most do not pay the right amount….. levels of Taxation in Nigeria are too low, 5% Vat?, and we want infrastructure and economy development?

Nigeria is not the only country in recession, however Nigeria is the only country who want the government to perform magic to bring the country out of recession.

Some of the actions taken by USA and UK includes Quantitative Easing (printing money to give to bank to pump into the economy), selling government assets (shares, building, bonds, gold deposits etc.),increase in taxation of some luxury goods, borrowing etc...Nigeria government has proposed all these things and Nigerians have rejected them all, therefore while oil prices remain low, we are left with diversification and attempt to grow non-oil sector of the economy, encourage local production and limit importation of goods and services, this should help the economy, but Nigerian are not patience, they want imported rice, imported everything because they are cheaper.....importing everything does not create jobs in ABA, it also put pressure on Naira because we don't sell enough goods to other countries to earn dollars, especially when the only item we export has gone down in value, everyone importer is now looking for dollar to import items.....
SDK, it is time you come up with an alternatives if you don't want government to raise taxes, there are no magic wands......

Anonymous said...

Oya kuku kill us Ma!
As if the hard life is not enough for una

sholetoga said...

This government of Buhari is confused. And this Kemi Adeosun ,just come up with stupid stuff called policy, that will not heed nothing or improve the economy positive........WTF Kemi Adeosun go get yourself Essential Economics textbook. Sham......

jay said...

So she's comparing nigeria with UK who has a system that actually works! This government just don't want to see its citizens happy at all! This days, kuku kill us o

Anonymous said...

I don't understand this country called, Nigeria! Must people die for this wicked govt before they know that things are hard! They should fear God ooo! E don too much nah! Han!😈

ifeoluwa said...

This decision must have been deliberated on by experienced and highly educated people in the field, if you want your country to develop, you need to start doing what other developing countries are doing, reason why she compared UK with nigeria.
Its only the RICH that pop champagne and make use of other luxury items,increasing VAT on these goods is a way to redistribute wealth/ or raise funds to provide amenities that every Nigerian needs.
Yes we need jobs, light, good road, water and all, but fund is also required, the best we can do is to support their decisions and watch out for the outcome, if we really desire A Better Nigeria.

Amacastel said...

Wicked & confused govt, if the want to raise money, house of Rep (lower chamber should be scrabbed) or it should be made a part-time job & only sitting allowance should be payed.

Anonymous said...

I couldn't have said it better. The tax is on champagne, yacht and items like super cars. How does that affect the poor. You view the comments here and your mind skips at the level of ignorance. Only 4% of wealthy Nigerians pay taxes, the government is trying to bring the right system yet they will complain. Guess you all have to muster ill words out of your preconceived mind.

Anonymous said...

I heard her speak this morning with her British accent. Are her papers complete to be in Nigeria?

Mrs bekks said...

For once a brilliant mind, dullards everywhere. Only if u know how much people spend on luxury drinks, pls they should be taxed. A very good move by the government

Princess Iyabeji said...



The policy being purposed is only to affect the rich and not the poor.



Anonymous said...

The owners of the luxury goods business are employers . Do you want them to start sacking people?

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