The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has announced that the committee is proposing new legislation to the National Assembly aimed at increasing the value-added tax (VAT) from 7.5% to 10%. During an interview on Channels TV’s Politics Today, Oyedele explained that this proposal is part of a broader effort to streamline Nigeria’s tax system and reduce the overall tax burden on both individuals and businesses.
He highlighted that the committee is also working on consolidating the numerous existing taxes in Nigeria to simplify the tax system and make it more efficient. The draft tax law, which the committee has prepared, will soon be submitted to the National Assembly for consideration.
Oyedele expressed concerns about Nigeria’s fiscal situation, noting significant issues with both tax and non-tax revenue. He described the entire fiscal system as being in a “state of crisis.” He outlined the committee’s three primary mandates: improving governance and financial coordination, transforming the country’s revenue profile, and optimizing the management of government assets.
Regarding the proposed VAT increase, Oyedele mentioned that the law, if passed, would raise the rate from 7.5% to 10% beginning in 2025, with additional increases planned for the future. Alongside this VAT increase, the committee is recommending a reduction in personal income tax, particularly for individuals earning N1.5 million per month or less, who would see their tax rates decrease. Additionally, corporate income tax rates are expected to be reduced from 30% to 25% over the next two years.
Oyedele also discussed the plan to consolidate various taxes, such as the IT levy and education tax, into a single tax. Initially, this consolidated tax would be set at 4%, with a planned reduction to 2% in the coming years.
