Federal Government Sets Six-Week Deadline to Rewrite Nigeria’s VAT Rules Under Tax Reform Drive

The Federal Government has launched a six-week process to produce a new Value Added Tax (VAT) Modification Order aimed at aligning Nigeria’s VAT regime with the recently implemented Tax Reform Acts.

The initiative follows the inauguration of an inter-ministerial committee by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, in Abuja on Friday.

According to the Ministry of Finance, the committee is expected to deliver a comprehensive VAT Modification Order 2026 that will replace the previous framework, which has now been rendered obsolete by the new tax legislation that came into force on January 1, 2026.

The ministry described the reform as a key step in implementing Nigeria’s most extensive tax overhaul in decades, designed to simplify tax administration, improve regulatory certainty, strengthen business competitiveness, protect vulnerable citizens and stimulate long-term economic growth.

The committee has been mandated to review the country’s VAT administration framework, identify areas requiring clarification and consult stakeholders across the public and private sectors before finalising new classifications for VAT-exempt and zero-rated goods and services.

Its assignment also includes preparing detailed schedules of VAT-exempt and zero-rated supplies, incorporating Harmonised System (HS) Codes, assessing the revenue implications of proposed classifications, recommending any legislative amendments and producing implementation guidelines for the new order.

Speaking at the inauguration, Oyedele said the committee’s work would be guided by five core principles: strict adherence to the law, growth-oriented policy design, clarity and certainty, broad stakeholder engagement and alignment with international best practices.

He stressed that the new VAT framework should promote industrialisation, attract investment, encourage exports, support innovation, strengthen food security and facilitate Nigeria’s energy transition while preserving the integrity of the VAT system.

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

He added, “This Order should promote industrialisation, investment, exports, innovation, food security and energy transition, without undermining the integrity of the VAT system.”

The ministry said the committee would submit its draft VAT Modification Order, implementation notes, stakeholder consultation report and the proposed schedules of exempt and zero-rated supplies at the end of its six-week assignment.

Although the identities of committee members were not disclosed, the ministry said it comprises representatives from 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.

The government said the broad membership reflects its intention to combine public and private sector expertise in developing a VAT regime that balances economic growth with efficient tax administration.

The VAT review forms part of the implementation of the Tax Reform Acts signed into law by President Bola Tinubu in June 2025 after approval by the National Assembly.

The reforms include the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill and the Joint Revenue Board (Establishment) Bill, all of which took effect on January 1, 2026.

Government officials say the reforms are intended to improve the ease of doing business, boost investor confidence and establish a modern, transparent and growth-driven tax system for Nigeria.