The Tax and Fiscal Policy Reforms Committee is proposing an increase in the Value added tax rate from 7.5 percent to 10 percent.
This was disclosed by the Chairman of the Presidential and Fiscal Policy Reforms Committe, Taiwo Oyedele at a public consultation workshop for journalists and public analysts held in Abuja.
The theme of the speech was, “Proposed changes to the national tax policy, tax laws and administration.”
Oyedele stated that the VAT revenue-sharing formula had also been reviewed to increase state collection rate from 50 to 55 per cent, local government area to 35 per cent and reduce FG rate to 10 per cent”.
He added that less than 10 percent of Nigerians fulfil their obligation to file and pay their taxes to required authorities.
He explained that the implementation of the increase in VAT will leads to increase in government revenue and also leads to decrease the price of goods and services.
He said, “The reforms will reduce Company Income Tax from 30 per cent to 25 per cent but it will be implemented in phases, so like in 2025, it may be reduced from 30 per cent to 27.5 per cent and then in 2026, reduced from 27.5 per cent to 25 per cent. The VAT as well, which is part of the items we are adjusting upwards will also be in phases, in 2025, a little increment and in 2026, another increment.
“So overall, we don’t want to drop government revenue overnight, if we adjust overnight, the impact on government revenue will be significant and if it is increased overnight, the impact is still significant, so we would see a lot of phasing in the work we are doing but we would pass the law and it would tell you what the rate would be in the future. These are some of the things we are saying should be done to prove that there is proper planning.”
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