The House of Representatives has adopted a 7.5% Value-Added Tax (VAT) rate, rejecting the proposed increase to 15%.This decision is part of the tax reform bills submitted by President Bola Tinubu in October, aiming to modernize tax collection, distribution, and governance across federal, state, and local levels. The approved VAT rate will be distributed based on a new formula proposed by the Nigerian Governors' Forum (NGF), allocating 50% equally among states, 20% based on population, and 30% based on consumption.
Other key amendments include:
- Maintaining the current VAT rate: The House rejected proposals to increase the VAT rate to 10% by 2025 and 15% by 2030.
- Exempting military salaries from income tax: Lawmakers approved an exemption of military personnel salaries from income tax.
- Rejecting the reintroduction of inheritance tax: The House clarified that inherited assets will not be taxed before distribution.
- Introducing penalties for bribery and tax fraud: Individuals or corporate entities attempting to bribe or unduly influence tax officials will face fines of up to ₦2 million or a maximum three-year jail term.
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