The federal government increased VAT from 5% to 7.5% from February 1, 2020.
Speaking in Lafia, the Nasarawa State capital, Osinbajo explained that no payment of VAT on food, drugs and educational items.
The Vice President stated this in Lafia during the launching of the national micro, small and medium enterprises clinics for viable enterprises.
“The new value-added tax which has gone up from 5% to 7.5%, many people have said it is higher tax burden on the consumers and of course it has implications for those who are trading as well.
“But we must remember that this is the lowest VAT rate in the whole of Africa; Ghana VAT rate was 15%, they reduce it to 12.5%, ours is 7.5%.
“It is also important to mention that companies and MSME with low turnover of less than N25m do not have to register for VAT and as a result of this, government has worked out a way of not creating any extra burden for small and medium-size companies.
“In other to reduce the impact of VAT increase on consumers, several basic items such as food, drugs and educational items are exempted from VAT, so there is no payment of VAT on food, drugs and educational items,” he said.
