The House of Representatives has adopted the Tax Reform Bills as a working document, confirming that Nigeria’s Value Added Tax will remain unchanged at 7.5%.
Presenting the report on Thursday, the Chairman of the Finance Committee, James Faleke, assured lawmakers that contentious areas had been addressed and reaffirmed that the VAT rate would not increase. He also emphasized that VAT should be based on consumption.
The committee proposed the repeal of the Federal Inland Revenue Service (FIRS) to establish the Nigeria Revenue Service, which would oversee federal revenue collection. Faleke expressed optimism that the new agency would enhance tax harmonization and administration.
Following deliberations, Speaker Tajudeen Abbas announced the adoption of the report, commending the Finance Committee for its work. “All 36 states and the Federal Capital Territory had representatives in the sub-committee. This is the first time such a report has received near-unanimous approval,” Abbas stated.
An earlier version of the Nigeria Tax Bill had proposed a gradual VAT increase from 7.5% to 12.5% by 2029 and 15% by 2030. However, strong opposition from stakeholders, including the Trade Union Congress, led to its revision, with the VAT rate now maintained at 7.5%.
The tax reform initiative, championed by President Bola Tinubu, initially faced resistance from northern governors who feared it could adversely affect their regions. However, after discussions, the Nigeria Governors’ Forum endorsed the bills upon reaching an equitable VAT-sharing agreement.
A two-day public hearing held by the Senate on February 24 and 25 saw participation from key stakeholders, including Finance Minister Wale Edun, FIRS Chairman Zacch Adedeji, Nigerian National Petroleum Company Limited Group CEO Mele Kyari, and the Comptroller General of Customs, Adewale Adeniyi. Their input helped shape the final recommendations.
With the House’s adoption of the report, the Tax Reform Bills move closer to becoming law, marking a significant step in Nigeria’s fiscal policy restructuring.
