The federal government has announced the exemption of Value added Tax on CNG products, pharmaceutical products, and some imported food items amongst others.
The Minister of Finance and Coordinating Minister of the Economy Wale Edun disclosed this on Tuesday during a programme on AIT titled, ‘Moneyline.’
He said, “Where we are is that on VAT, a whole range of items from CNG to pharmaceutical products and so forth are exempted from VAT. It is an executive order. I will sign it. It is currently with the Ministry of Justice.
“In an executive order which I am also authorized to sign, the Inflation Reduction Act will now contain a range of import duty exemptions, lowering of tariffs and outright tax breaks.”
Highlighting the benefits to the economy, Edun said the move aims to address the unemployment challenge in the country.
He said, “For instance, for employment, if you employ more people, you will be given a tax break against it. So, that range of fiscal incentives will also be laid out in an executive order which Mr President will in due course sign in the next week or two.
“It should be out. He has to go through certain regulatory, and certain legal processes, but nothing is holding it up except just the administrative processing, which we will ensure will be quick. And it is important to point out that costs have gone up, and so these are ways of helping them manage that cost”.
Edun also addressed the windfall levy imposed on banks, stating that it would generate revenue for the economy, as the society was entitled to it.
A windfall profit levy is a one-time surtax levied on a company or industry when economic conditions result in large and unexpected profits.
The minister said, “The windfall was passed as a levy, so it’s not a tax. In terms of windfall levy, I think where you have on-hand income, where you have a section of the society or a set of an industry or a set of companies that earn money through new, not through hard work of their own, the society deserves a chance to share some of that.
“And it’s just redistribution of that. So I think that takes care of the issue of the windfall levy. It’s done everywhere else in the world where you have, especially the energy sector as well as banking.”
He added that most policies implemented upon his assumption into office were not influenced by the International Monetary Fund (IMF).
“They give us advice, and we do take concessional financing from the World Bank. As for the IMF, more often than not, we disagree with them, and we don’t have anything from them other than what we inherited. Which was the COVID financing” the minister said.