The National Assembly is reviewing a bill that proposes increasing the value-added tax (VAT) from 7.5% to 10% by 2025, according to a report by TheCable.
VAT is a consumption tax applied to goods and services at every stage of the supply chain where value is added. The executive bill, seen by TheCable on Sunday, outlines plans to raise the tax rate to 10% in 2025, with further increases to 12.5% between 2026 and 2029.
The document specifies that VAT will be charged at the following rates: (a) 10% for the 2025 assessment year; (b) 12.5% for the assessment years 2026, 2027, 2028, and 2029; and (c) 15% from the 2030 assessment year onward.
On May 8, Taiwo Oyedele, chairman of the presidential committee on fiscal policy and tax reforms, stated that an increase in the VAT rate is necessary. In response to the recommendation on September 8, former Vice President Atiku Abubakar criticized the proposed hike, calling it a "regressive and punitive policy." However, on September 9, Finance Minister Wale Edun noted that the VAT rate had not remained unchanged. The International Monetary Fund (IMF) had previously advised the federal government to raise the VAT rate to at least 10% by 2022.