The Nigerian House of Representatives has passed four key tax reform bills aimed at boosting the country’s economy. The bills, which completed their third reading on Tuesday, were initially submitted to the National Assembly by the Executive in October 2024 and underwent extensive scrutiny, including a clause-by-clause review and public hearings.
One of the most debated aspects of the Nigeria Tax Bill was Section 146, initially proposing a phased increase in Value-Added Tax (VAT) from 7.5% to 12.5% between 2026 and 2029, with a further increase to 15% by 2030. The proposal faced strong criticism and was subsequently amended by the committee, maintaining VAT at 7.5% a decision later approved by the House.
On the VAT revenue distribution, the initial plan allocated 10% to the federal government, 50% to states and the Federal Capital Territory (FCT), and 35% to local governments. However, following committee recommendations, the states’ share was raised to 55%, while the federal government remained at 10% and local governments retained their 35% allocation.
With the House’s approval, the bills now move to the Senate for passage. Once a harmonized version is finalized, it will be sent to President Tinubu for assent. If enacted, these reforms could bring significant changes to Nigeria’s tax system, revenue allocation, and overall fiscal policies.
