The Federal Government has assured Nigerians that President Bola Tinubu’s ongoing fiscal and tax reforms have not introduced any new VAT taxes, contrary to public concerns.
Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Professor Taiwo Oyedele, stressed that the reforms are designed to ease the burden on low- and middle-income earners while ensuring equity and fairness.
“It’s not a new tax. Some said the tax is being proposed. The tax is not being proposed. Some believe this president has introduced tax after tax, and I challenge them to point to one newly introduced tax,” Oyedele told participants during a workshop for media practitioners in Abuja on Wednesday.
He explained that many of the levies being debated in the public space, including the controversial five per cent fuel surcharge, are not new but provisions in long-standing laws predating the current administration.
Oyedele recalled that in July 2023, barely two months after assuming office, President Tinubu signed four executive orders suspending taxes hurriedly introduced during the final days of the previous administration. These, he noted, included excise duties on plastic items and vehicle importation.
“Many of us are not even aware because this president did not allow those taxes to take effect. They were suspended and eventually removed,” he added, while clarifying that the much-debated Cybersecurity Levy was enacted years ago and not initiated by the Tinubu government.
Also speaking at the event, the Special Adviser on Tax Policy to the Chairman of the Tax Reforms Committee, Mr. Mathew Osanekwu, disclosed that Nigeria has successfully collected over ₦600bn in Value Added Tax (VAT) from global digital service providers such as Facebook, Amazon, and Netflix.
“These are not Nigerian entities, but they are now paying VAT under Section 10 of the VAT Act. They are registered in Nigeria and are also appointed as agents of collection,” Osanekwu said.
He noted that amendments to the VAT Act had empowered the Federal Inland Revenue Service (FIRS) to bring non-resident companies offering services in Nigeria into the tax net, stressing that the move aligns with global best practices and ensures Nigeria benefits from services consumed locally but delivered by foreign firms.
The reforms, which take effect in January 2026, aim to overhaul Nigeria’s weak tax system, broaden the revenue base, and improve compliance. Nigeria’s tax-to-GDP ratio currently stands at about 10.8 per cent, one of the lowest globally and far below the African average of 16 per cent and the global benchmark of 30 per cent.
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Oyedele emphasised that the framework will consolidate multiple taxes, remove overlapping charges, and tie levies to transparent, project-linked spending. According to him, the reforms are progressive, protecting vulnerable groups while taxing higher earners fairly.
Under the reforms, personal income tax thresholds have been adjusted to ensure that Nigerians earning less than ₦800,000 annually will pay no tax on that amount. Similarly, small businesses earning under ₦100m per year will enjoy a 0 per cent corporate tax rate.
“This reform is the most progressive Nigeria has ever seen. It eliminates taxes on the poor, reduces the burden on the middle class, and targets higher-income earners fairly,” Oyedele said.
Painting a picture of Nigeria’s fragile economy as of May 2023, Oyedele described the fiscal system as being “on the verge of collapse,” with foreign reserves encumbered by unpaid forward contracts and subsidy-induced debts by the Nigerian National Petroleum Company Limited (NNPCL).
With barely 200,000 barrels of free crude available due to pre-sales, he warned that financing fuel subsidies with borrowed money secured against future crude production could have led to a total shutdown of fuel imports, similar to the crisis in Sri Lanka.
“People may ask whether life is better now than it was two years ago. The right question is: would life have been better today if those reforms hadn’t happened?” Oyedele said.
