The Nigerian House of Representatives has adopted four tax reform bills, maintaining the current Value Added Tax (VAT) rate at 7.5%.
This decision was made during a plenary session on Thursday, March 13, 2025, following a clause-by-clause consideration of the bills.
Key Details:
- VAT Rate: The House rejected proposals for an incremental increase in VAT, opting to sustain the existing 7.5% rate.
- Distribution Formula: A new VAT distribution formula was adopted, allocating 50% based on equality, 20% on population, and 30% on consumption.
- Contentious Clauses: The House addressed and resolved several contentious issues, including modifying clauses on inheritance tax and ensuring continuous funding for key agencies like TETFUND, NASENI, and NITDA.
- Bills Adopted: The adopted bills include the Nigeria Tax Act, the Nigeria Revenue Service Bill, the Joint Revenue Board Establishment Bill, and the Tax Administration Bill.
This development is seen as a significant step in Nigeria’s tax reform efforts, aiming to streamline revenue collection and enhance fiscal policies.