The Federal Executive Council (FEC) has approved a number of new policies that will go into effect with immediate effect.
Firstly, a new tax regime has been introduced for Nigerians that purchase luxury goods.
The council equally approved a memo for the procurement of more coaches for the Nigerian Railway Corporation (NRC) to improve rail transportation.
The Minister for Finance, Mrs. Kemi Adeosun, announced the approval of the new tax policy.
She said the council approved the revised National Tax Policy meant to review the tax rates in certain areas.
She, however, pointed out that the government would work with NASS for amending certain laws to back the policies.
Adeosun hinted that taxes on some basic commodities might not be increased, taxes on luxury goods would certainly be increased.
“What the committee has shown is that we should look at actually increasing VAT on some luxury items.
“At 5%, we have the lowest VAT among our peers and whilst we don’t think VAT should be increased on basic items.
“If you are going to drink Champagne, for instance, you should pay more.
“Champagne in the UK attracts VAT of 20%, so why should it be 5% in Nigeria?
“So, they have made recommendations that we should identify some luxury items and increase VAT on those items immediately.
“That decision is a sensible suggestion. We are going to talk to NASS to see how we can implement it.
“But as far as basic goods are concerned, there will be no increase.
The council also said they are concerned about the spike in food prices in the country.
To this effect, the Buhari led administration has set up a task force to look to intervene in the matter.
One of the FEC members, Lai Mohammed said: “The major highlights were council resolved to set up a task force on food security.
“When these products are available when they do reach the market, they are sold at very exorbitant prices.
“So, the government has set up a task force on food security to ensure that an end is put to the waste.
“The task force will also curb the waste of tons of produce sitting and rotting in farms or in the markets.
“The important thing is to look at what areas of intervention can the government make.
“The intervention can be in the area of subsidy for transportation.
“Clearly the government is concerned and is trying to do something to bring food prices down.”