Champagne Prices to go up as FG increases VAT on Luxury GoodsWritten by Oluwatimilehin MakindePosted on 02 02, 2017
Champagne Prices to go up
Champagne lovers in Nigeria will soon have to be paying more for a bottle of champagne as the Federal government plans to increase Value Added Tax (VAT) on luxury goods.
The decision was taken at the end of a meeting of The Federal Executive Council presided over by Acting President Yemi Osinbajo on Wednesday.
At the meeting, Minister of Finance, Mrs. Kemi Adeosun announced that the council had approved the revised National Tax Policy which will see an increase in VAT on luxury items.
“What the committee has shown is that we should look at actually increasing VAT on some luxury items,” she told State House correspondents.
“With VAT of 5%, we have the lowest VAT. While we don’t think VAT should be increased on basic items, if you are going to drink champagne in the United Kingdom, the VAT is 20%; so, why should it be 5% in Nigeria?
“So, they have made recommendations that we should pull out some luxury items and increase VAT on those items immediately. And I think that is a very valid and sensible suggestion, which we are going to talk to the National Assembly about to see how we can implement it.
“But as far as basic goods are concerned, no. I believe it is only fair that when you consume luxury goods, you should pay a little bit more. The National Assembly will decide the percentage.”
The increase will definitely affect the purchasing power of the consumers, thus having a direct impact on the drink industry.