The Presidential Committee on Fiscal Policy and Tax Reforms has proposed raising Nigeria’s Value Added Tax (VAT) from the current 7.5% to 10%. The committee’s chairman, Taiwo Oyedele, revealed this plan during an appearance on Channels TV’s Politics Today on Monday.
Oyedele explained that the committee aims to consolidate multiple taxes in the country, simplifying the tax system and reducing the overall burden on taxpayers. The draft tax law, which includes the proposed VAT increase, will soon be submitted to the National Assembly for consideration.
He highlighted the critical state of Nigeria’s fiscal system, emphasizing that the country’s tax revenue is significantly low. “The revenue profile of the country is abysmally low. If you dedicate our whole revenue to fixing roads, it will be insufficient,” Oyedele noted.
The proposed tax law suggests that the VAT rate will move to 10% starting in 2025, with additional increases planned for subsequent years. Alongside the VAT hike, the committee recommends a reduction in personal income tax for individuals earning about ₦1.5 million or less per month and a gradual decrease in corporate income tax from 30% to 25% over the next two years.
To further ease the tax burden, Oyedele mentioned that various taxes, such as the IT levy and education tax, will be consolidated into a single tax, starting at 4% and eventually decreasing to 2% in the coming years.