The value-added tax (VAT) rate in Nigeria will remain at 7.5% as the House of Representatives has officially adopted the Tax Reform Bills as a working document. This decision was confirmed by the Chairman of the Finance Committee, James Faleke, during a presentation to lawmakers on Thursday.
Faleke reassured the House that the VAT rate will not change, despite previous debates. He also highlighted that any contentious issues had been addressed, and emphasized that the committee’s recommendation is for VAT to be based on consumption.
A key proposal from the committee was the dissolution of the Federal Inland Revenue Service (FIRS) and the establishment of the Nigeria Revenue Service, which will take over the responsibility of revenue collection for the federal government. Faleke expressed confidence that this restructuring would result in better tax administration and smoother revenue harmonization across the country.
After deliberating on the various clauses of the Tax Reform Bills, Speaker Tajudeen Abbas confirmed the adoption of the report, praising the Committee on Finance for their thorough work. He noted that the report is a reflection of the nation’s collective will and highlighted that it had received unanimous approval from all 36 states and the Federal Capital Territory, a rare occurrence in legislative history.
The Tax Reform Bills, which include the Joint Revenue Board of Nigeria (Establishment) Bill, 2024, Nigeria Revenue Service (Establishment) Bill, 2024, and Nigeria Tax Bill, 2024, contain provisions that will shape the country’s fiscal future. One of the notable proposals from the Nigeria Tax Bill suggests a gradual increase in VAT, from the current 7.5% to 12.5% by 2029, with the final target of 15% by 2030.
As the bills move forward, the Nigerian government is set to implement a more comprehensive tax system aimed at streamlining revenue collection and enhancing overall economic growth.
