October 14, (THEWILL) – The National Assembly has received an executive bill proposing increase in the Value Added Tax (VAT) from 7.5 percent to 10 percent in 2025 and a further increase to 12.5 percent in 2026 through 2029.
According to TheCable, the bill, if passed and assented to by the President, will see a further VAT increase to 15 percent in 2030.
The bill also proposes a reduction in the Corporate Income Tax (CIT) from 30 percent to 27.5 percent in 2025 and a further cut to 25 percent in 2026. However, the bill proposes that Companies with less than N20 million turnover be exempted from paying the CIT.
“VAT shall be charged on the value of all taxable supplies at the following rates (a) 2025 year of assessment 10 percent; (b) 2026, 2027 2028 and 2029 years of assessment 12.5 percent (c) 2030 year of assessment and thereafter 15 percent.
“Tax shall be levied, for each year of assessment in respect of total profits of every company, in the case of; (a) a small company, at zero percent; and (b) any other company, at the rate of-(i) 27.5 percent in 2025 year of assessment, and(ii) 25 percent from 2026 year of assessment.
“Notwithstanding any provision of this Act or any other enactment, where, in any year of assessment, the effective tax rate of a company is less than 15 percent, such company shall recompute and pay an additional tax that makes its effective tax rate equal to 15 percent.
“The provisions of this section shall apply to (a) a company that is a constituent entity of an MNE group; and (b) any other company with an aggregate turnover of N20 billion and above in the relevant year of assessment.
“The companies covered under this section and the determination of the additional tax payable shall be in accordance with regulations issued by the Service”, the executive bill stated.
THEWILL reports that Taiwo Oyedele, Chairman, Presidential Fiscal Policy and Tax Reforms Committee, had said the committee is proposing a law to the National Assembly to increase valued added tax from the current 7.5% to 10%.
Speaking during an interview on Channels TV’s Politics Today, Oyedele, had said, “The revenue profile of the country is abysmally low. If you dedicate our whole revenue to fixing roads it will be insufficient. The third is on government assets. The law we are proposing to the National Assembly has the rate of 7.5% moving to 10% from 2025. We don’t know how soon they will be able to pass the law. Then subsequent increases are also indicated in terms of the year they will kick in.”
Former Vice-President, Atiku Abubakar, had on September 9, warned against any further hike in VAT, saying the move can become a “blazing inferno that will consume the very essence of our people.”
