The Presidential Committee on Fiscal Policy and Tax Reforms has proposed reviewing states’ and local governments’ share of the Value Added Tax revenue to 90 percent, and reducing the Federal Government’s share from 15 to 10 percent.
The panel also recommended an upward review of the current 7.5 percent rates charged to customers.
The Chairman of the committee, Taiwo Oyedele, disclosed this at a stakeholder’s exposure and impact assessment session organized to discuss some of the major proposals in the National Tax Policy in Abuja.
The Presidential Committee on Fiscal Policy and Tax Reforms has proposed significant changes to the distribution of Value Added Tax (VAT) revenue in Nigeria. The key proposals are:
- Reducing the Federal Government’s share of VAT revenue from 15% to 10%.
- Increasing the states’ share to 90%, which they would then share with local governments.
- Reviewing the current 7.5% VAT rate charged to customers, with a proposal to increase it.
These proposals are part of the broader tax reform efforts by the current administration, aimed at boosting the nation’s tax revenue and achieving a minimum tax-to-GDP ratio of 18%. The reforms are also intended to improve the business environment by eliminating multiple taxes.The committee chairman, Taiwo Oyedele, disclosed these proposals during a stakeholder engagement session organized to discuss the National Tax Policy.
The strategic meeting is a vital aspect of ensuring the successful implementation of the tax reform policies.
President Bola Tinubu had inaugurated the fiscal policy and tax reforms committee last August to address the country’s revenue profile and business environment challenges. The proposed changes to the VAT revenue distribution are a key part of these efforts
