FG Sets Up Committee to Review VAT Rules

The Federal Government has inaugurated an Inter-Ministerial Committee to prepare the 2026 Value Added Tax (VAT) Modification Order as part of efforts to support the implementation of Nigeria’s new tax laws.

The committee was inaugurated in Abuja by the Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, on Friday.

The development was disclosed in a statement issued by the Head of Information and Public Relations at the Federal Ministry of Finance, Efe Ovuakporie.

According to the statement, the committee is expected to produce a VAT Modification Order that will provide greater clarity for businesses, investors and tax administrators while supporting the implementation of the Tax Reform Acts, which took effect on January 1, 2026.

The Permanent Secretary of the Federal Ministry of Finance, Mr Raymond Omachi, will serve as chairman of the committee.

Oyedele described the ongoing tax reforms as the most extensive restructuring of Nigeria’s tax system in decades. He said the reforms are intended to simplify tax administration, improve certainty, strengthen the country’s competitiveness, protect vulnerable citizens and create a stronger foundation for long-term economic growth.

He explained that the previous VAT Modification Order was issued under the repealed VAT Act, making it necessary to introduce a new Order that aligns with the provisions of the Nigeria Tax Act, 2025.

The minister said the committee’s assignment goes beyond updating an existing document, adding that it is expected to develop a practical and clear VAT Modification Order that reflects the realities of Nigeria’s changing economy.

He noted that the new Order should remove areas of confusion, make tax compliance easier for businesses, support investment decisions and provide tax authorities with clearer guidance in implementing the law.

Oyedele directed the committee to conduct a detailed review of the legal framework, existing administrative procedures and policy directives governing VAT administration. He said special attention should be given to VAT-exempt and zero-rated provisions contained in Part IV of the Nigeria Tax Act, 2025.

He also instructed members to identify areas requiring further clarification and engage widely with stakeholders, including government agencies, private sector organisations, professional associations and other interest groups, to address implementation concerns and validate tax classifications.

The committee is also expected to recommend a comprehensive schedule of VAT-exempt and zero-rated goods and services while considering revenue implications, social impact, Nigeria’s international treaty obligations and regional integration commitments.

In addition, members are expected to prepare a practical VAT Modification Order that aligns with the Nigeria Tax Act and propose amendments to the Tax Reform Acts and other related laws where necessary to strengthen implementation.

Oyedele urged the committee to ensure that its recommendations remain consistent with both the intent and provisions of the new tax laws. He said the final document should support industrial growth, encourage investment, promote exports, strengthen food security, foster innovation and support Nigeria’s energy transition while preserving the integrity of the VAT system.

He added that reducing uncertainty in VAT administration would allow businesses, investors, regulators and tax authorities to operate with greater confidence.

The minister also encouraged the committee to study international best practices while ensuring that its recommendations reflect Nigeria’s economic conditions and development priorities.

The committee has been given six weeks to complete its assignment and submit a draft VAT Modification Order, schedules of VAT-exempt and zero-rated supplies with their Harmonised System Codes, implementation notes, a stakeholder consultation report and recommendations on any legislative amendments considered necessary.

Members of the committee include representatives of the Federal Ministry of Finance, the Nigeria Revenue Service, the Nigeria Customs Service, the Federal Ministry of Industry, Trade and Investment, the Joint Revenue Board, the Manufacturers Association of Nigeria, the Tax Advisory Committee and the Tax Justice and Governance Platform.

Expressing confidence in the committee, Oyedele said the combination of experts from the public and private sectors would help produce a practical framework capable of supporting efficient VAT administration under Nigeria’s new tax system.

He added that businesses need certainty, investors require confidence and government needs a VAT system that is simple to administer and capable of supporting economic growth. He urged the committee to complete its assignment with diligence, objectivity and urgency.

The minister said the committee’s recommendations would play a major role in improving VAT administration, making it easier to do business in Nigeria, boosting investor confidence and advancing the Federal Government’s fiscal reform programme.