Nigeria’s Minister of Finance, Wale Edun, announced plans to raise the Value Added Tax (VAT) to 15% at the IMF/World Bank Annual Meetings in Washington DC.

The increase will primarily affect luxury goods, while essential items consumed by low-income Nigerians will remain exempt or have a zero rate.

President Bola Tinubu’s administration aims to implement necessary reforms while protecting vulnerable citizens. Edun emphasized, “The poorest and most vulnerable will be protected… VAT will raise revenue from the wealthy on luxury goods, while exempting or applying a zero rate to essentials for the poor and average citizens.”

This approach balances revenue generation with social welfare, ensuring the VAT increase doesn’t disproportionately burden the poor.