*Dr. Zacch Adedeji, Executive Chairman of the Federal Inland Revenue Service, avers with the new Nigerian tax laws, food, education, transport and agriculture will be VAT-free, describing the development as ‘the best thing that has happened to Nigeria鈥檚 fiscal ecosystem since 1960’

Isola Moses | 绿帽献妻

Nigeria’s Federal Inland Revenue Service (FIRS) has highlighted how and why the Federal Government鈥檚 recent reforms exempt taxpayers in the food, education, shared transportation, and agriculture sectors of the economy from the Value-Added Tax (VAT).

绿帽献妻 reports Dr. Zacch Adedeji, Executive Chairman of FIRS, explained these in a recent interview commemorating his two years in office.

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According to him, the far-reaching tax reforms, described as the most significant fiscal transformation since Nigeria’s Independence, are designed to ease off the burden on consumers and businesses, while improving government revenue collection in the country.

Adedeji lauded President Bola Ahmed Tinubu for fulfilling his campaign promise of simplifying tax compliance while removing hurdles faced by taxpayers.

He further stated: 鈥淲ith these new laws, food, education, transport, and agriculture will be VAT-free.

鈥淭he President has fulfilled his promise to make businesses flourish by removing all burdens and hurdles.

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“This is the best thing that has happened to Nigeria鈥檚 fiscal ecosystem since 1960.鈥�

The tax administration agency also noted that the recent reforms consolidate multiple tax laws into a single code with effect January 2026.

Highlighting further benefits of the new-fangled Tax Acts, the FIRS stated explained the new codes reduce the number of tax types to single digits, introduces a simpler framework for individual Nigerians and businesses, and provides relief for smaller enterprises.

Under the provisions, businesses with annual turnover below N50 million will no longer pay tax.

Whereas, the thresholds for personal income tax have been adjusted to protect low-income earners cum taxpayers.

The four new Tax Acts

President Tinubu, June this year, had signed the four major Tax Acts into Laws.

These are the Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service Establishment Act, and the Joint Revenue Board Establishment Act.

They are collectively known as the Tax Acts quartet, which were formulated with the aim to broaden Nigeria’s tax base, improve compliance, and enhance transparency across all tiers of government.

Tinubu also appointed Mr. Taiwo Oyedele, Fiscal Policy Partner and Africa Tax Leader at PricewaterhouseCoopers, to chair the Presidential Committee on Fiscal Policy and Tax Reforms. The committee.

The Committee was comprised of private and public sector experts, and was instrumental in designing and implementing the reforms in the fiscal environment.

Tax reforms yielding results, says Adedeji

Enumerating the benefits of the new tax laws, Dr. Adedeji, Executive Chairman of FIRS, declared the reforms are already yielding results.

According to him, Nigeria鈥檚 tax-to-GDP ratio has risen from 10 percent to 13.5 percent in just two years, with a target of 18 percent by 2027.

In August this year, the Federal Government disbursed a record over N2 trillion, with nearly 70 percent of monthly government allocations now coming from taxes collected by the FIRS.

Adedeji revealed the improved revenue has helped 30 states to repay 鈧�1.85 trillion in debts within the past 18 months, while debt servicing costs鈥攑reviously consuming 90 percent of government revenue鈥攈ave dropped to about 50 percent. External reserves have also grown on the back of stronger fiscal stability.

FIRS to become ‘Nigeria Revenue Service’

In regard to the latest reforms, the FIRS will be renamed the Nigeria Revenue Service.

The government said this name change would reflect the FIRS role as the central tax authority for all tiers of government, not just the Federal Government.

The FIRS Chair stated: 鈥淭he word 鈥楩ederal鈥� gave the wrong impression that we only collect for the federal government.

鈥淚n reality, we collect VAT, of which 90 percent belongs to the states.鈥�

He as well credited Tinubu鈥檚 broader economic decisions, including fuel subsidy removal and exchange rate unification, with strengthening the Federation Account and improved allocations to the three tiers of government.

Adedeji asserted: 鈥淭he health of the federation account has blossomed greatly, as there are no bogus subsidy claims to deplete the pool.”

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