The Federal Executive Council (FEC) has resolved that Value-Added Tax (VAT) on contracts signed earlier than Feb.1 remains 5 per cent.
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Malam Garba Shehu, Senior Special Assistant, Media and Publicity to the President, briefed State House correspondents after FEC meeting presided over by President Muhammadu Buhari on Wednesday at the Presidential Villa, Abuja.
Shehu gave an insight on the report of cabinet committee on the effective date of the commencement of the 7.5 per cent VAT on government contracts.
“By law, the new VAT came into effect first of February; government had worried about the implication of this on contracts that had been issued earlier than this year.
“Some of the contracts that are been handled by various ministries, particularly Ministry of Works, for instance, are coming from many years back; so should the VAT on payments on such contracts be 7.5 per cent or 5 per cent as earlier signed unto.
“A final decision was reached today; and this is that new contracts that are signed from Feb.1 going forward will attract 7.5 per cent VAT.
“Contracts earlier than Feb. 1 signed on 5 per cent VAT will remain at 5 per cent; so there is no more confusion on this matter,’’ he said.
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