National Assembly Proposes Increase in VAT to 10% by 2025, 12.5% from 2026

The Nigerian National Assembly is considering a bill to increase the Value-Added Tax (VAT) from 7.5 per cent to 10 per cent by 2025. The proposed changes also include a gradual increase to 12.5 per cent from 2026 to 2029, according to a report from TheCable.

The proposed tax structure shows that VAT will be charged on taxable supplies at various rates over the coming years: 10 per cent in 2025, 12.5 per cent from 2026 through 2029, and 15 per cent starting in 2030.

In addition to the VAT increase, the bill aims to reduce the corporate income tax (CIT) from 30 per cent to 27.5 per cent by 2025 and further to 25 per cent by 2026. Companies with an annual turnover below N20 million will be exempt from this tax.

This move follows a recommendation by Mr Taiwo Oyedele, the chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, who stated the need for an increase during a discussion in May. Subsequently, in September, there were reports that the Federal Government had increased VAT rate from 7.5 per cent to 10 per cent. The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, had denied these claims. He said that a 7.5 per cent VAT will continue to be charged on all VAT-able goods and services.

If the proposed bill is passed into law, it will further increase the tax burden of Nigerians.

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