Nigeria To Raise VAT To 10% Amid Revenue Crisis, Says Fiscal Policy Chairman

Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, has announced that the committee is proposing an increase in the Value Added Tax (VAT) from the current 7.5% to 10%. This was disclosed during an interview on Channels TV’s.

Oyedele stated that the draft tax law, which includes the VAT increase, will be submitted to the National Assembly for approval. He also mentioned that the committee is working on consolidating multiple taxes in Nigeria to reduce the overall tax burden.

“We have significant issues with our tax revenue and overall fiscal health, which can be described as being in crisis,” Oyedele said. He outlined the committee’s three broad mandates: improving governance and financial coordination, transforming revenue profiles, and managing government assets.

The proposed law suggests that the VAT rate will increase to 10% by 2025, with further incremental increases planned. Alongside this, Oyedele highlighted planned reductions in personal and corporate income taxes. For individuals earning N1.5 million a month or less, personal income tax will decrease, while companies will see a reduction in their income tax rate from 30% to 25% over the next two years.

“We are also working on consolidating various taxes into a single levy,” Oyedele added. “Initially, this will be set at 4% and is expected to decrease to 2% over the coming years.”