VAT Reforms: FG Clarifies Stance, Proposes Business-Friendly Measures

• No Proposed Increase in VAT Rate

• Input VAT Credit for Businesses Suggested

• Basic Goods and Services to be VAT-Exempt

Eko Hot Blog reports that, addressing concerns raised by media reports, the Federal Government has clarified its position on Value Added Tax (VAT) reforms.

Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, denied proposing an increase in the VAT rate.

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However, Oyedele acknowledged that his statements during a recent event were quoted out of context. “This is quoted out of context to suit the objective of the author,” he stated.

Instead, the committee proposed measures aimed at easing the burden on businesses and protecting the poor. Oyedele emphasized, “We are proposing full input VAT credit for businesses to reduce their cost of doing business and minimise the strain on their cash flows.”

Furthermore, the committee suggested removing VAT on essential items like basic food, education, and healthcare.

“We are proposing to remove VAT on an expanded list of basic food, educational and healthcare items to protect the poor,” Oyedele explained.

Other proposed reforms include harmonizing consumption taxes, adjusting revenue-sharing formulas in favor of states, and removing VAT on exported services and intellectual property.

Moreover, the committee aims to increase the VAT exemption threshold for small businesses and enhance the VAT refund process.

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Oyedele clarified, “It is important to note that the above proposals do not represent the position of the government but our committee’s reform proposals, which we are discussing with the private sector for their input.”

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