“FG Plans VAT Hike: Value-Added Tax Set to Rise to 10%”

Babatunji Wusu –

Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, has revealed plans to propose a significant increase in Nigeria’s value-added tax (VAT) from 7.5% to 10%. This proposal is part of a broader strategy to overhaul the country’s tax system.

In an interview on Channels TV’s *Politics Today*, Oyedele explained that the committee aims to streamline Nigeria’s tax framework to reduce the overall tax burden. The new legislation, which will be presented to the National Assembly, seeks to address the country’s revenue challenges.

“We have substantial issues with our tax revenue and overall revenue generation, reflecting a fiscal system in crisis,” Oyedele stated. “Our committee was tasked with three main objectives: improving governance related to finances, transforming revenue collection, and managing government assets.”

The proposed VAT increase would take effect in 2025, pending legislative approval. Additionally, the committee’s plan includes several compensatory measures. Personal income tax rates will decrease for individuals earning up to ₦1.5 million per month, and corporate income tax rates are set to drop from 30% to 25% over the next two years.

Oyedele also highlighted a plan to consolidate various taxes into a single framework. Initially, businesses will pay a unified tax rate of 4%, which will eventually decrease to 2% in the coming years. This consolidation aims to simplify the tax system and ease the financial burden on companies.

Overall, the proposed reforms reflect a strategic effort to enhance revenue generation while also making the tax system more efficient and manageable for taxpayers.