Senate Backs 7.5% VAT, Approves New Sharing Formula and Sustains Key Education and Innovation Funds

Senate Backs 7.5% VAT, Approves New Sharing Formula and Sustains Key Education and Innovation Funds

The Nigerian Senate has endorsed the Finance Committee’s recommendation to retain the current Value Added Tax (VAT) rate at 7.5% as part of the ongoing tax reform bills. 

This decision comes amid broader efforts to restructure the nation’s fiscal policy without placing additional burdens on citizens.

As part of the reforms, a new VAT sharing formula was approved. According to the revised structure, 50% of VAT revenue will be distributed equally among the states, 20% will be allocated based on population size, while the remaining 30% will be shared in proportion to consumption levels across the states.