Government Denies Plans For VAT Rate Hike, Citing Misinformation

Government Denies Plans For VAT Rate Hike, Citing Misinformation

The Federal Government refutes recent media claims suggesting a proposed increase in the Value Added Tax (VAT) rate. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, addressed this matter via his official communication channels.

Earlier reports had circulated, implying that Oyedele had advocated for alterations to the current VAT structure, including adjustments in revenue distribution between states and the federal government. However, Oyedele clarified that his statements at a recent event organized by the Tax Reforms Committee were taken out of context.

He emphasized the committee’s recommendations, aiming to offer full input VAT credit for businesses to alleviate operational costs and ease cash flow strains. Additionally, the proposal suggested removing VAT on a broader range of essential goods such as food, education, and healthcare items, with a focus on protecting vulnerable demographics.

Oyedele outlined the existing challenges within Nigeria’s VAT system, highlighting issues like limited input VAT credit for businesses, taxation of basic consumption items, and complexities for small businesses in VAT compliance. To address these, the committee proposed several reforms, including streamlining consumption taxes into a single VAT, adjusting revenue sharing to benefit states, and incentivizing non-oil exports by exempting them from VAT.

He stressed that these proposals were subject to discussions with the private sector and did not reflect government policy. The aim was to foster dialogue and gather input for comprehensive tax reform.

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