Type: Legislation
The Nigerian Senate has paused a Bill proposing an immediate VAT rise from 7.5% to 10%, followed by increases to 15% by 2027 and 12.5% by 2029, with further debates set for early 2025. The proposed VAT hikes aim to address the country’s growing deficit, now above 4%, and align with IMF-debt program prerequisites, alongside reducing fuel subsidies. The reforms include exemptions for essential goods and services, phasing out smaller consumption taxes, and easing VAT compliance for small businesses by raising the registration threshold. Nigeria’s VAT rate, one of the lowest in West Africa, was last increased in February 2020 from 5% to 7.5%, amid concerns about its impact on poverty. Critics argue that further increases would worsen living conditions in a country where 46.7% of the population already lives below the poverty line.
Effective date: Early 2025
