National Assembly Reviews Bill Proposing phased VAT increase to 15% by 2030, while slashing corporate tax to boost investment.
The National Assembly is considering an executive bill proposing an increase in the Value-Added Tax (VAT) from 7.5% to 10% by 2025. The bill, seen by TheCable on Sunday, outlines further increases to 12.5% from 2026 through 2029, with a final rise to 15% by 2030.
VAT is a consumption tax applied at each stage of the supply chain where value is added. The proposed hike has sparked reactions, with former vice-president Atiku Abubakar calling it a “regressive and punitive policy,” while Wale Edun, the minister of finance, said the rate remains unchanged for now.
The VAT increase aligns with recommendations from the International Monetary Fund (IMF), which advised Nigeria in 2021 to raise the rate to 10%.
Corporate Income Tax Cut to 25% by 2026
The bill also proposes reducing the Corporate Income Tax (CIT) rate from 30% to 27.5% by 2025, and to 25% by 2026. Small companies, with turnovers below N20 million, remain exempt from CIT. For companies with an effective tax rate below 15%, an additional tax will be levied to bring the rate up to this threshold.
This move is part of a broader strategy to stimulate business growth, with Taiwo Oyedele, chair of the presidential committee on fiscal policy and tax reforms, previously suggesting a CIT cut to encourage investment.
The new tax regime, if passed, will take effect in 2025.
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