Oyedele gives committee six weeks to draft new VAT order

The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr Taiwo Oyedele, has inaugurated an inter-ministerial committee to develop a new Value Added Tax (VAT) Modification Order within six weeks as the Federal Government moves to implement Nigeria’s sweeping tax reforms aimed at improving the business environment and stimulating economic growth.

The committee has been tasked with producing a comprehensive VAT framework that aligns with the Tax Reform Acts, which came into effect on January 1, 2026, replacing the previous VAT Modification Order and establishing a new regime for VAT administration.

According to a statement issued by the Federal Ministry of Finance, the committee will draft the VAT Modification Order 2026, which will define VAT-exempt and zero-rated goods and services while providing greater certainty for businesses operating in Nigeria.

Speaking at the inauguration in Abuja, Oyedele described the recently enacted tax laws as the most far-reaching overhaul of Nigeria’s tax system in decades, noting that the reforms are designed to simplify tax administration, improve compliance, attract investment and enhance Nigeria’s economic competitiveness.

He said the committee’s assignment was to produce “a modern, coherent and forward-looking VAT Modification Order that complements the new law and supports Nigeria’s economic transformation.”

The committee is expected to review the country’s existing VAT administration framework, identify areas requiring clarification and engage stakeholders across the public and private sectors to validate VAT classifications.

It will also prepare comprehensive schedules of VAT-exempt and zero-rated supplies, assess their revenue implications and consistency with Nigeria’s international obligations, draft implementation guidelines and recommend legislative amendments where necessary.

Oyedele said the committee’s work would be guided by five key principles—strict adherence to the law, growth-oriented policy design, clarity and certainty, broad stakeholder engagement and alignment with international best practices.

He added that the new VAT framework should support industrialisation, manufacturing, investment, exports, innovation, food security and Nigeria’s energy transition while preserving the integrity of the country’s VAT system.

“The Tax Reform Acts represent the most comprehensive reform of Nigeria’s tax system in decades. They simplify our tax laws, improve certainty, enhance competitiveness, protect vulnerable Nigerians and position our economy for sustainable growth,” Oyedele said.

He stressed that the VAT Modification Order should encourage productive economic activities without creating distortions within the tax system.

At the end of its assignment, the committee is expected to submit a draft VAT Modification Order 2026, schedules of exempt and zero-rated supplies with their corresponding Harmonised System (HS) Codes, implementation notes and a comprehensive stakeholder consultation report.

The committee comprises 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.

The broad-based composition is intended to ensure that the new VAT framework reflects the interests of government, businesses and taxpayers while promoting effective tax administration.

The exercise follows the enactment of four major tax reform laws signed by President Bola Tinubu in June 2025, including the Nigeria Tax Act, the Nigeria Tax Administration Act, the Nigeria Revenue Service (Establishment) Act and the Joint Revenue Board (Establishment) Act.

Economic analysts believe the development marks another significant milestone in Nigeria’s tax reform programme, with the new VAT framework expected to improve the ease of doing business, strengthen investor confidence and create greater certainty for manufacturers and exporters through clearer tax classifications and exemptions.