The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has announced that the committee intends to propose legislation to the National Assembly to raise the value-added tax (VAT) from its current rate of 7.5% to 10%.
Oyelede disclosed this during an interview on Channels TV’s Politics Today, Raye24reporters
He elaborated on the committee’s efforts to streamline various taxes in Nigeria to facilitate a reduction in the overall tax burden.
He further indicated that the tax legislation prepared by the committee is set to be presented to the National Assembly.
Oyedele said, “We have significant issues in our tax revenue. We have issues of revenue generally, which means tax and non-tax. You can describe the whole fiscal system in a state that is in crisis.
“When my committee was set up, we had three broad mandates. The first one was to look at governance: our finances as a country, borrowing, and coordination within the federal government and across sub-national.
“The second one was revenue transformation. The country’s revenue profile is abysmally low. If you dedicate our whole revenue to fixing roads it will be insufficient. The third is on government assets.
“The law we are proposing to the National Assembly has a rate of 7.5%, moving to 10% from 2025. We don’t know how soon they will be able to pass the law. Then subsequent increases are also indicated in terms of the year they will kick in.
“While we are doing that, we have a corresponding reduction in personal income tax. Anybody who is earning about ₦1.5 million a month or less will see their personal income tax come down. Companies will have income tax rates come down by 30% over the next two years to 25%. That is a significant reduction.
“Other taxes they pay are quite many: IT levy, education tax, etc. We are consolidating all these into a single one. They will pay 4% initially. That will go down to 2& in the next few years.”
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