Former Minister of Finance, Zainab Ahmed, says the Federal government will raise Value-Added Tax to 7.5% by 2020 from the present 5%.
The former minister made this known on Tuesday while speaking on the sidelines of the ongoing Bloomberg Emerging and Frontier Forum in London.
This, she said, would help the federal government improve revenue generation.
“We have developed a strategic revenue growth initiative, which we have started implementing,” Ahmed said. “Our target is to increase revenue to 65 per cent minimum in 2019 so that in the next three years, we are able to attain 80-85 per cent of our revenue target.
“We are looking at adding value-added tax from 5% to 7.5%. 5% is one of the lowest VAT globally. The increase will not be done overnight but hopefully, by the next budget (2020), the new increase will take effect.
“We recently increased the minimum wage and one of the agreements we had with labour was that there would be some marginal increase on VAT to enable us to handle the incremental cost of increasing wages.”
