This move follows remarks made by the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, on May 8, 2024, where he highlighted the need for a higher VAT rate to boost revenue.
Abuja, Nigeria — The National Assembly is deliberating on a bill that proposes an increase in Nigeria’s Value-Added Tax (VAT) from the current 7.5% to 10% by 2025.
According to a document seen by TheCable on Sunday, the proposed legislation suggests further increases, with VAT set to rise to 12.5% between 2026 and 2029. By 2030, the tax rate could reach 15%.
This move follows remarks made by the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, on May 8, 2024, where he highlighted the need for a higher VAT rate to boost revenue.
In addition to VAT changes, the bill also outlines adjustments to corporate income tax (CIT). It proposes reducing the CIT from 30% to 27.5% by 2025, with a further reduction to 25% in 2026. Companies with a turnover of less than N20 million will remain exempt from CIT.
The bill details the following VAT increases:
- 10% in the 2025 year of assessment;
- 12.5% from 2026 to 2029;
- 15% from 2030 onwards.
On corporate taxes, the document outlines:
- Zero percent CIT for small companies;
- 27.5% CIT for other companies in 2025;
- 25% CIT from 2026 onwards.
It also mandates that companies with an effective tax rate of less than 15% must recalculate and pay an additional tax to reach that threshold.
This provision targets companies that are part of multinational enterprise (MNE) groups or have a turnover exceeding N20 billion annually. The bill specifies that these adjustments will be governed by regulations issued by the Federal Inland Revenue Service (FIRS).
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