7.5% VAT Takes Effect When, January 13 or February 01?
While the Accountant General of the federation has said that the new finance law with respect to 7.5% VAT, takes effect on January 13, 2020, The Federal Government through the finance minister has fixed Saturday (February 1) to begin the implementation of 7.5 per cent Value Added Tax espoused by the finance law.
The law, according to the government, will take effect after all the necessary administrative procedures must have been completed, especially the gazetting of the Act by the Federal Ministry of Justice.
The Minister of Finance, Mrs Zainab Ahmed, confirmed the February 1 implementation date in Abuja at the inauguration of the board of the Federal Inland Revenue Service.
She said the February 1 commencement date had put to rest every speculation regarding the take-off date of the new VAT regime.
The minister said once a bill was signed into law, it would take effect immediately, but noted that there were certain administrative procedures and formalities to be finalised before commencement.
The VAT increase which is meant to help government achieve its revenue projections for the 2020 budget is a part of the tax reforms included in the 2019 Finance Act.
She said with the Act, there would be more revenue to finance key government projects especially in the areas of health, education and critical infrastructure.
She said, “The implementation of Value Added Tax is to take effect from February 1, 2020 after all the necessary administrative procedures have been completed, especially the gazette of the Act by the Federal Ministry of Justice.”
The minister’s remark contradicted an earlier claim by the Accountant General of the Federation, Ahmed Idris, who said the new VAT increment took effect from January 13 when the 2020 Finance Bill was signed into law.