The Presidential Committee on Fiscal Policy and Tax Reforms has recommended increasing the Value Added Tax (VAT) percentage from its current rate of 7.5%. This announcement was made on Channels TV’s Politics Today on Monday by Taiwo Oyedele, the committee’s chairman.
A Draft of the Proposed Law
Oyedele affirmed that a draft of the proposed tax law will be submitted to the National Assembly. The committee is working to combine different taxes to simplify the process and significantly reduce the overall tax burden.
Objectives for the Creation of the Presidential Committee on Fiscal Policy and Tax Reforms
Oyedele stated that Nigeria’s fiscal structure is in a state of crisis due to burdensome issues with tax revenue and the overall revenue system. Therefore, the Presidential Committee on Fiscal Policy and Tax Reforms was created and tasked with:
- Examining governance, prioritizing national finances, debt acquisition, and collaboration between the federal and sub-national governments.
- Transforming the country’s revenue profile, which is currently unacceptably low. He elaborated that “even if we allocated all our revenue to infrastructure, it would still be insufficient.”
- Managing government assets.
Related News: Nigerian government to tax crypto traders a 7.5% VAT in transaction fees on KuCoin
He further explained that the proposed law involves a gradual increase in the VAT rate from 7.5% to 10%, starting from 2025 and continuing through subsequent years. The exact duration for passing the law is uncertain.
Additionally, a proposal was made to reduce personal income tax for individuals earning NGN 1.5M or less. This is alongside the proposal for increasing VAT.
As a result, individuals will see a decrease in their personal income tax rate. Moreover, businesses will experience a 25% reduction in their tax rates over the coming two years. All these proposals aim to enhance Nigeria’s fiscal policy.
Discover more from DiutoCoinNews
Subscribe to get the latest posts sent to your email.
