The Nigerian government, led by Finance Minister Wale Edun, has announced plans to increase the Value Added Tax (VAT) on luxury goods to 15%. This change is part of a new bill currently being reviewed by the National Assembly. Edun explained that while luxury items will face this tax hike, essential goods needed by low-income Nigerians will remain exempt from VAT or be taxed at a zero rate.

During an investor meeting at the IMF/World Bank Annual Meetings in Washington, Edun emphasized President Bola Tinubu’s commitment to protecting vulnerable citizens while making necessary economic reforms. He assured attendees that a list of essential goods exempt from VAT will be made available to the public soon.

Edun also expressed optimism about Nigeria’s oil sector, highlighting improvements in security in oil-producing regions and new investments from major companies like Total and ExxonMobil. These developments are expected to increase oil production and enhance foreign exchange inflows into the country.

On the topic of fuel subsidies, Edun noted that while reforms were announced earlier this year, full implementation began only last month. He mentioned that the economic benefits from removing these subsidies would become clearer in the coming months.

In addressing Nigeria’s financial strategy, Edun revealed that the government chose to issue domestic dollar bonds despite the International Monetary Fund (IMF) advising against this action. He reassured stakeholders that Nigeria values its cooperative relationship with the IMF but retains the autonomy to make its own financial decisions.