MORE HARDSHIP: Tinubu’s Tax Reforms Committee Wants VAT Rate To Increase Above 7.5%

The Presidential Committee on Fiscal Policy and Tax Reforms has proposed an increase in the value-added tax (VAT) rate.
Taiwo Oyedele, the committee’s chairman, made this announcement on Monday during a session organized by the committee to assess policy exposure and impact.

Currently, Nigeria’s VAT rate stands at 7.5 percent.

Oyedele also revealed that the committee is suggesting a revision of the VAT revenue-sharing formula, with states and local governments receiving a larger share.

Specifically, they are proposing that states and local governments collectively receive 90 percent of the revenue, with the federal government’s share reduced from 15 percent to 10 percent.

According to section 40 of the VAT Act, the federal government currently receives 15 percent of the tax revenue, while states receive 50 percent and local governments receive 35 percent.

However, the committee’s recommendation seeks to adjust this distribution in favor of the states and local governments.

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