Tax increase: Presidential committee to send bill to NASS on VAT increase by 10%

By Ezurike Ugochukwu

Chairman Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, says the committee is proposing to send a bill to the National Assembly for an increase in valued added tax from the current 7.5 per cent to 10 per cent.

Oyedele made the revelation while speaking as a guest at Channels TV programme last Monday.

His committee he said was working to consolidate multiple taxes in Nigeria to ensure tax reduction.

Oyedele added the tax law the committee drafted would be submitted to the National Assembly.

He 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, coordination within the federal government and across sub-national.

“The second one was revenue transformation. The revenue profile of the country 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 the rate of 7.5 per cent moving to 10 per cent 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 that is earning about N1.5 million a month or less, they will see their personal income tax come down. Companies will have income tax rate come down by 30 per cent over the next two years to 25 per cent. That is a significant reduction.

“Other taxes they pay are quite many: IT levy, education tax, etc. All these we are consolidating into a single one. They will pay 4 per cent initially. That will go down to 2 per cent in the next few years,” he said.