FG sets up committee to review VAT framework

 

The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, has inaugurated an inter-ministerial committee to develop a new Value Added Tax Modification Order to support the implementation of the Tax Reform Acts of Nigeria. The minister announced the inauguration in a statement posted on his X handle on Friday, noting that the committee was inaugurated at the Federal Ministry of Finance headquarters in Abuja. He explained that the committee would draft a modern VAT framework to align with the Tax Reform Acts, which took effect on January 1, 2026.

Highlighting the significance of the legislation, Oyedele said, “The Tax Reform Acts represent the most comprehensive reform of Nigeria’s tax system in decades.” He added, “They simplify our tax laws, improve certainty, enhance competitiveness, protect vulnerable Nigerians, and position our economy for sustainable growth,”.

The minister noted that the mandate of the committee was not to recreate the previous VAT Modification Order, which has been superseded by the new legislation. Instead, he said it would develop a “modern, coherent, and forward-looking VAT Modification Order that complements the new law and supports Nigeria’s economic transformation.”

According to the statement, the committee will review the existing VAT administration framework of Nigeria, draft a new VAT Modification Order, and recommend legislative amendments where necessary. The committee has been mandated to review the existing VAT administration framework of Nigeria and identify areas requiring clarification, engage public and private sector stakeholders to validate classifications and ensure alignment with economic and social objectives, develop comprehensive lists of VAT-exempt and zero-rated supplies while considering revenue implications and international obligations, draft a clear and implementable VAT Modification Order, and recommend legislative amendments where necessary.

The minister stated that five guiding principles would steer the work of the panel, including fidelity to the law, growth-oriented design, clarity and certainty, broad stakeholder engagement, and international benchmarking. Speaking on the desired outcome, Oyedele said, “This Order should promote industrialisation, investment, exports, innovation, food security, and energy transition, without undermining the integrity of the VAT system,”.

The committee has been given six weeks to complete its assignment and submit a draft VAT Modification Order 2026, schedules of VAT-exempt and zero-rated supplies with corresponding Harmonised System codes, implementation notes, and a stakeholder consultation report. Its membership comprises representatives of the Federal Ministry of Finance, the Nigeria Revenue Service, the Nigeria Customs Service, the Federal Ministry of Industry, Trade and Investment, the Joint Revenue Board, the Manufacturers Association of Nigeria, the Tax Advisory Committee, and the Tax Justice and Governance Platform.

Commending the composition of the panel, the minister said, “The membership of this Committee brings together deep knowledge, expertise, and experience from across government and the private sector,”. The statement added that the Tax Reform Acts, which came into effect on January 1, 2026, were designed to simplify the tax system of Nigeria, improve the ease of doing business, boost investor confidence, and support sustainable economic growth.