Tax Reforms Aim for Fairer System
FG proposes zero percent VAT on food, education, healthcare, exempt rent, transport —Oyedele
Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, clarified on Monday that the proposed tax reform bills before the National Assembly are not intended to target any region of Nigeria. Speaking in Abuja during an interactive session on the proposed Nigeria Tax Bill, 2024, organized by the House of Representatives, he addressed the country’s socioeconomic challenges, including 33.88% inflation, high unemployment, and over 133 million people in multidimensional poverty.
Mr. Oyedele outlined the administration’s goals to eliminate inefficient taxes that burden small businesses and generate minimal revenue. The reforms aim to streamline taxes, merging similar levies, reducing the total number of taxes to a single digit, and focusing on high-yield, broad-based taxes. Proposed measures include zero VAT on food, education, and healthcare; exemptions for rent and transport; and discontinuation of redundant consumption taxes. The reforms also emphasize improving efficiency and revenue allocation to states where goods and services are consumed, with over 97% of SMEs exempt from VAT.
Currently, under Section 40 of the VAT Act, VAT revenue is distributed 15% to the Federal Government, 50% to states and the FCT, and 35% to local governments. Oyedele stressed the need for transparency, accountability, and public participation in the reforms, noting they must be people-centered.
House Speaker Hon. Tajudeen Abbas affirmed the legislature’s commitment to scrutinizing the bills in the national interest. He highlighted the need to expand Nigeria’s tax base, improve compliance, and establish sustainable revenue streams. Abbas noted Nigeria’s low tax-to-GDP ratio of 6% compared to the global average of 15%, emphasizing the urgency of diversifying revenue and reducing reliance on debt.
He called for thoughtful reforms that balance public revenue needs with fairness and transparency. The session, he said, seeks to resolve ambiguities and align the bills with constitutional provisions, acknowledging the healthy debates surrounding the proposals.
FIRS Chairman Dr. Zacch Adedeji reaffirmed the agency’s readiness to implement the laws once enacted.
