CBN supports FG’s plan to peg VAT at 7.5%, insists cashless policy is here to stay

Godwin Emefiele, the Governor of Central Bank of Nigeria (CBN), says the plan to increase Value Added Tax (VAT) from five per cent to 7.5 per cent is in the right direction to raise country’s revenue.

Emefiele stated this while fielding questions from journalists after the CBN Monetary Policy Committee meeting held in Abuja on Friday, September 20.

He said the government had the responsibility to fend for every citizenry by providing basic infrastructure like roads, electricity and hospitals among others.

He explained that the government had only two ways to fund such projects, which are by raising revenue and through loan collection.

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According to him, the present government has been criticised by some people for a high rate of debt incurred.

“Government, unfortunately, has no option, if it does not borrow, it must raise revenue and you all agree with me that it has obligations to meet up with.

” The increase in VAT to 7.5 per cent is low compared to other countries, in fact, with this increase, Nigeria has the lowest in the world.

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“If the government can meet its obligation through this increment, it should be supported,” he said.

He appealed to Nigerians to show understanding and support the government’s policies.

Cashless policy here to stay – CBN
In a related development, the CBN said it would continue to implement the cashless policy in line with its mandate to ensure an efficient payment system.

Emefiele said that contrary to claims in some quarters that many Nigerians would suffer the negative impact of the policy, only about five to 10 per of bank customers would be affected.

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The apex bank had in a circular to Deposit Money Banks stated that from Wednesday, September 18, it would impose three per cent processing fees on withdrawals and two per cent processing fees on lodgements of amounts above N500, 000 for individual accounts.

For corporate accounts, the apex bank in the circular said that DMBs would charge five per cent processing fees on withdrawals and three processing fee on lodgements of amounts above N3m.

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