The Nigerian government has proposed a zero percent Value Added Tax (VAT) on essential goods and services, including food, education, and healthcare.
This initiative, spearheaded by Mr. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, is part of a broader strategy to tackle the country's pressing socioeconomic issues such as high inflation, unemployment, and widespread poverty.
The proposed tax reform aims to "do away with nuisance taxes with very low revenue yield," according to Mr. Oyedele.
By focusing on high-revenue-yielding taxes that are broad-based and relatively easy to collect, the government intends to streamline the tax system.
The reform also seeks to merge taxes with overlapping bases and reduce the total number of taxes to single digits, thereby enhancing efficiency and increasing state revenues.
A key aspect of the reform is the exemption of over 97% of Small and Medium Enterprises (SMEs) from VAT obligations, which is expected to lower overall costs and reduce inflation.
Mr. Oyedele emphasized that the reform is designed to ensure "efficiency and give more revenue to states where goods and services are consumed."
The tax reform bills, currently under consideration by the National Assembly, aim to create a more equitable tax system that supports economic growth while reducing the financial burden on citizens.
Speaker of the House, Honourable Tajudeen Abbas, noted that the bills represent critical proposals to expand Nigeria’s tax base and improve compliance. He assured that the House would scrutinize the bills diligently to ensure they align with the national interest.
Comments