Nigeria FG Eyes VAT Hike to 10% as Part of Major Tax Reforms

The Nigerian government plans to increase value-added tax (VAT) from 7.5% to 10%, as revealed by Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee. The proposal aims to enhance tax revenue while concurrently reducing personal income tax for low earners and corporate tax rates.

The Federal Government of Nigeria is considering an increase in the value-added tax (VAT) rate from 7.5% to 10%. This proposal comes from the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, who shared the plans during an interview on Channels TV’s Politics Today.

Oyedele emphasized the pressing need for reforming the country’s tax system, highlighting significant shortfalls in tax revenue and the overall fiscal state. The committee aims to consolidate various taxes to streamline the process and ultimately reduce the tax burden on citizens. The proposed tax law will be submitted to the National Assembly, with an intended implementation date of 2025, though the timeline for approval remains uncertain.

In tandem with the VAT increase, the government plans to reduce personal income tax for individuals earning less than N1.5 million monthly, offering a decrease in rates. Corporations are also expected to benefit, with a gradual reduction of their income tax from 30% to 25% over the next two years.

The initiative aims to address Nigeria’s low revenue profile, which, according to Oyedele, is inadequate for necessary infrastructure improvements. The proposed tax changes represent a significant shift in fiscal policy, with the government seeking to balance increased revenue generation with relief for individual taxpayers and businesses.


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