Business Hilights

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VAT on electricity contradicts FG’s claim on no effect on poor Nigerians

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The trending claims of the Federal Government that the rise in Value Added Tax (VAT) from hitherto 5% to 7.5% would not affect the life of poor Nigerians may have been punctured with the fact that electricity tariff is paid by every Nigerian both rich and poor after all.

Already, several Discos have announced the reflection of the new VAT rate effective from February 1, 2020.

The Discos said as soon as new VAT regime begins, all their transactions payments will reflect the new rate.

Apart from monthly tariffs, the Discos said it would implement an upward review in the prices of meters sold to customers under the Meter Access Provider (MAP) scheme introduced in 2019.

Business Hilights recalibration using the new VAT rate showed a marginal increment. Whereas a single-phase meter which used to cost N38, 325 (5% VAT inclusive) would now cost N39, 237.50 (7.5% VAT inclusive), three-phase meter which used to cost N70, 350 (5% VAT inclusive) will now costs N72, 025.00 (7.5% VAT inclusive).

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