House of Reps adopts Tax Reform Bills as a working document, maintains VAT at 7.5%

While presenting the report to the lawmakers on Thursday, the chairman of the finance committee, James Faleke, confirmed that the VAT rate would remain at 7.5% as it has been, adding that contentious areas have been addressed. Faleke also stated that the committee recommended that VAT be based on consumption.

The committee recommended repealing the Federal Inland Revenue Service to establish the Nigeria Revenue Service, which would be responsible for collecting revenues for the Federal Government of Nigeria.

Faleke expressed optimism that the Nigeria Revenue Service would enhance seamless tax harmonization and administration.

Following deliberations on the bill’s clauses, Speaker Tajudeen Abbas announced that the House had adopted the report as a working document. Abbas commended the Committee on Finance for their efforts, describing the report as a reflection of the nation’s collective will.

“All the 36 states, including the Federal Capital Territory, have their representatives in the sub-committee. This is the first time such a report is getting hundred percent approval by almost all members,” Abbas said.

The Tax Reform Bills include the Joint Revenue Board of Nigeria (Establishment) Bill, 2024; Nigeria Revenue Service (Establishment) Bill, 2024; Nigeria Revenue Service (Establishment) Bill, 2024; and Nigeria Tax Bill, 2024.

The Nigeria Tax Bill proposed a gradual increase to the value-added tax (VAT) from the current 7.5 percent to 12.5 percent through 2026, 2027, 2028, and 2029, while by 2030, the VAT will be raised to 15 percent.

On February 24 and 25, the Senate held a two-day public hearing on proposed tax reform bills, bringing together key stakeholders from the nation’s economic and financial sectors to discuss and shape crucial fiscal policies.

Attendees included the Minister of Finance and Coordinating Minister of the Economy, Wale Edun; the Chairman of the Federal Inland Revenue Service (FIRS), Zacch Adedeji; the Group CEO of the Nigerian National Petroleum Company Limited (NNPCL), Mele Kyari; members of the Federal Executive Council; heads of relevant agencies; and the Comptroller General of Customs, Adewale Adeniyi, among others.