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FEC Approves Vat Increase To 7.2percent

The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed has disclosed that the Federal Executive Council (FEC) has approved N10.07 trillion budget proposal for the year 2020.

 

Briefing State House Correspondent at the end of the first FEC meeting at the Presidential Villa in Abuja wednesday, Mrs Ahmed said the council also approved 2020-2022 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) with 10.07trillion budget proposal for 2020 fiscal year, revenue target of N7.5 trillion, $55 per barrel oil benchmark, N305 per dollar exchange rate as well as highlighting the 2019 Budget performance.

 

Our State House Correspondent, Raliat Adenekan reports that the minister also revealed that the council approved the increase of Value Added Tax (VAT) from the current 5 percent to 7.2 percent. She however added that implementation of the new VAT rate would be subject to amendment of the extant VAT law and upon wide consultations with key  According to her, only 15 per cent of VAT revenues accrue to the federal government while the bulk of the remaining 85 percent goes to the states, explaining further that the planned increase was necessitated by the need to assist the states in shoring up their revenues to meet the new minimum wage demand.

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