Lawmakers reject Tinubu’s proposed changes to consumption and company taxes
In a major setback to President Bola Tinubu’s revenue-boosting efforts, Nigerian lawmakers have rejected proposed changes to the country’s consumption and company tax policies. The decision comes amid growing opposition from state governors and concerns over the economic impact of the reforms.
Tinubu’s plan sought to gradually double the value-added tax (VAT) rate from 7.5% to 15% over six years to generate additional revenue for the national budget. However, the proposal, which also included a revised formula for distributing VAT proceeds among Nigeria’s 36 states, failed to gain support in the House of Representatives.
The lawmakers also dismissed a proposal to lower the corporate tax rate from 30% to 25% by 2025, a move designed to cushion the effects of the VAT hike on businesses.
Despite these rejections, the government remains committed to overhauling Nigeria’s tax system, which is still governed by some laws dating back to the colonial era.
While lawmakers have approved certain changes, both chambers of the National Assembly must vote on them before they can be sent to the president for final approval.
Among the proposed reforms still under consideration are tax exemptions for minimum-wage earners and a relief of up to ₦500,000 ($460) to help low-income workers manage rent and rising housing costs.
The outcome of these debates will significantly impact Nigeria’s economic landscape as the government seeks new revenue streams to fund its ambitious fiscal plans.
