The proposed tax reforms are intended to lessen the number of taxes that Nigerians are subject to, according to Taiwo Oyedele, the head of the Presidential Committee on Fiscal Policy and Tax Reforms.
Oyedele claimed that the ongoing tax changes will improve Nigerians’ quality of life by lowering the Value Added Tax (VAT) to zero percent on food, education, and health in a statement that was followed by a poll on X on Monday night.
“The Presidential Fiscal Policy and Tax Reforms Committee’s proposal is to reduce the VAT rate to zero percent (0%) on food, health, education, and exemption for rent, transportation, and small businesses,” the tax expert said.
He added that export of services and intellectual properties will attract zero percent VAT to facilitate needed export growth.
This statement comes on the heels of various reports making the rounds that the Federal Government aims to raise VAT from 7.5 percent to 10 percent, making life unbearable for Nigerians.
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Oyedele, however, clarified that the upward rate adjustment is on non-essential items to partly offset the impact of the reduction in rate and exemption for essential items.
He added that this will ensure that the masses are protected, and provide some cushion for states who earn 85 percent of VAT revenue.
Data from the National Bureau of Statistics (NBS) shows that average Nigerian households spend almost all their incomes on essentials such as food.
Oyedele noted that reducing VAT on these areas would mean taking off the burdens of paying multiple taxes on many Nigerians.
In the proposed tax reform, according to Oyedele, over 97 percent of SMEs will be exempted from charging VAT on their sales, accruing them more gains.
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“Businesses will also get full credit for the VAT they pay on their assets and services, thereby lowering their overall costs and moderating inflation,” Oyedele said.
The proposed VAT reforms will ensure that refunds will be faster without the need for extensive tax audits to help business cash flow while allowing sharing of VAT revenue to and among states to be more equitable.
Poll shows 61% Nigerians want proposed tax reform
Poll conducted by Taiwo Oyedele, chairman of the Presidential Committee on Fiscal Policy and Tax Reforms revealed that 61 percent of Nigerians want the proposed tax reforms.
The online poll on X which lasted for 8 hours 25 minutes with 9,943 participants as at the time of filing this report showed that 25 percent Nigerians do not want the reforms while 14 percent “don’t know”.
