Senate maintains VAT, passes tax reform bills
Senate President, Godswill Akpabio. PHOTO CREDIT: X
Senate maintains VAT, passes tax reform bills.
The Senate has passed the tax reform bills proposed by President Bola Tinubu.
The four tax reform bills are the Joint Revenue Board (Establishment) Bill, 2025 (SB. 583); the Nigeria Revenue Service Establishment) Bill, 2025 (SB. 584); Nigeria Tax Administration Bill, 2025 (SB. 585); and Nigeria Tax Bill 2025 (SB. 586).
Meanwhile, the Senate rejected a proposal to increase the rate of Value Added Tax (VAT) to 10 per cent but retained it at 7.5 per cent.
The nation’s apex lawmaking body, which considered and passed the four tax reform bills submitted to it last year by President Tinubu, also rejected the idea of phasing out funding for Tertiary Education Trust Fund (TETFUND), National Information Technology Development Agency (NITDA) and National Agency for Science and Engineering Infrastructure (NASEN).
Instead, the Senate introduced a 4 per cent development levy to replace them.
The Senate noted that “These agencies of government are essential for human capital and overall economic development of the country.
“Phasing out their funding can lead to stagnation in education and the country losing out in technological evolutions and advancement.”
“The bill retained the funding of TETFUND, NASENI, NITDA, Cyber Security and NELFUND from the Development levy using the following sharing formula: Tertiary Education Trust Fund, 50%; Nigerian Education Loan Fund, 15%; National Information Technology Development Fund,- 10%; National Agency for Science and Engineering Infrastructure 10%; National Cybersecurity Funds – 5%; and Defence Security Funds,- 10%.”
Adopting a report presented by the chairman of the senate committee on Finance, Sani Musa, the legislative body explained its decision on VAT and declared that on VAT Rate, “The Bill retains the current VAT rate of 7.5%, and proposes for VAT input to be allowable on all items such as: fixed assets, overhead cost and administrative services.”
Similarly, the Company Income Tax rate is pegged at 30 per cent.
The passage of the bills came three months after the House of Representatives did the same.
President of the Senate, in a comment, disclosed that because of the controversies that trailed the bills, the Senate had to set up a special committee that looked into the issues before eventually referring the same to its Committee on Finance.
