The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has announced that the committee intends to propose legislation to the National Assembly to raise the value-added tax (VAT) from its current rate of 7.5% to 10%.
Oyelede disclosed this during an interview on Channels TV�s Politics Today.
He elaborated on the committee�s efforts to streamline various taxes in Nigeria to facilitate a reduction in the overall tax burden.
He further indicated that the tax legislation prepared by the committee is set to be presented to the National Assembly.
Oyedele said, �We have significant issues in our tax revenue. We have issues of revenue generally, which means tax and non-tax. You can describe the whole fiscal system in a state that is in crisis.
�When my committee was set up, we had three broad mandates. The first one was to look at governance: our finances as a country, borrowing, and coordination within the federal government and across sub-national.
�The second one was revenue transformation. The country�s revenue profile 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 a 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.
�While we are doing that, we have a corresponding reduction in personal income tax. Anybody who is earning about ?1.5 million a month or less will see their personal income tax come down. Companies will have income tax rates come down by 30% over the next two years to 25%. That is a significant reduction.
�Other taxes they pay are quite many: IT levy, education tax, etc. We are consolidating all these into a single one. They will pay 4% initially. That will go down to 2& in the next few years.�
