The Federal Government has announced exemption of basic food items, educational materials and medical supplies from Value Added Tax.
This was made known by the Minister of Finance, Zainab Ahmed, while justifying the proposed Finance Bill before the Senate Committee on Finance.
Ahmed said: “The bill proposes to introduce tax reform which will help government achieve its revenue projections for the 2020 budget.
“Some of these proposals include an increase in the VAT rate, moderation of inefficient and ineffective tax incentives and closing loopholes in the existing tax laws that allow tax avoidance resulting in tax revenue.
“The Finance Bill also proposes essential palliative to support MSME and mitigate the impact of the VAT rate increase on the most vulnerable businesses, communities and citizens in the economy.
“Some of these measures include: expanding the list of VAT-exempt items e.g. basic food items, educational materials and medical supplies.”