Oyedele committee awaits FG’s approval on VAT increment  

Mulls repeal of 50 taxes, targets 15% VAT by 2030

The Taiwo Oyedele Presidential Committee on Fiscal Policy and Tax Reforms is awaiting President Bola Tinubu’s approval of the various reforms to be implemented.

Speaking on Channels TV, yesterday, Oyedele said it had become expedient to review the country’s Value-Added Tax (VAT) rate upward from 7.5 per cent to 10 per cent any time soon, targeting 15 per cent by 2030. He said the committee had completed works on the draft of new laws to replace the old ones, which created huge problems for businesses and Nigerians.

According to him, only poor people pay taxes in Nigeria. “So, there is a need to shift focus and accommodate more Nigerians in the tax net. We shall beam searchlight on the middle and rich classes to ensure accurate taxes are paid as and when due. We await the Federal Government’s nod on the draft,” he added.

Oyedele mentioned that the committee had reformed taxation laws from local, and state to the federal levels where levies would be harmonised. He said the committee put in new rules, where taxpayers would expect a refund before checking if the taxes were paid diligently or not.

The committee, according to him, has equally reduced the rates on withholding tax, while excluding small businesses, stressing: “If your turnover is N50 million or more, you will be captured in the withholding tax net.”

When revenue is generated, he added, the government should ensure the revenue goes back to the community it came from.

“VAT will go up. Food should not be exempted. The rate for food will come down. VAT still exists whether turnover is N50 million above or not. When you buy raw food, you won’t pay VAT on it. Their bill for food will go down; the same thing on transportation, health and rent.

“If a business procures VAT, it will get the VAT back. The law we are passing to the National Assembly is moving VAT from 7.5 per cent to 10 per cent. We have reformed the incentive systems put in place. Our target is to get to 15 per cent VAT by 2030.”

He said the committee was proposing to repeal over 50 taxes people were paying and consolidate them into one. He confirmed that Nigerians were paying so many taxes, which were not getting to the government.

There are about eight major areas that generate income for the government, he disclosed, adding that five exclusively belong to the state governments and the remaining three to federal collections. Oyedele said incremental progress was not enough, adding: “We need to reform our fiscal policies with transparency and accountability on how to go about it.”