Government establishes panel to assess sales tax structure

Taiwo Oyedele, the Minister of Finance and Coordinating Minister of the Economy, has established an inter-ministerial committee tasked with creating a new Value Added Tax Modification Order to facilitate the implementation of Nigeria’s Tax Reform Acts.

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This committee's inception was announced by the minister via a statement posted on his X handle on Friday, marking a significant step towards aligning the nation's tax framework with the newly enacted legislation.

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The committee's primary objective is to craft a contemporary VAT framework that complements the Tax Reform Acts, which became effective on January 1, 2026, and usher in a new era of tax governance in Nigeria.

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The inauguration of the committee took place at the Federal Ministry of Finance headquarters in Abuja, underscoring the government's commitment to streamlining the tax system and fostering economic growth.

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According to Oyedele, the Tax Reform Acts constitute the most sweeping overhaul of Nigeria's tax system in decades, aimed at simplifying tax laws, enhancing competitiveness, and protecting vulnerable Nigerians while positioning the economy for sustainable growth.

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The minister emphasized that the committee's mandate is not to revive the previous VAT Modification Order, but rather to develop a modern, coherent, and forward-looking VAT Modification Order that supports Nigeria's economic transformation and aligns with the new legislation.

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The committee's tasks include reviewing Nigeria's existing VAT administration framework, drafting a new VAT Modification Order, and recommending legislative amendments where necessary to ensure a seamless implementation of the tax reforms.

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The committee has been entrusted with several key responsibilities, including reviewing the existing VAT administration framework, engaging stakeholders to validate classifications, and developing comprehensive lists of VAT-exempt and zero-rated supplies.

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Additionally, the committee will draft a clear and implementable VAT Modification Order, as well as recommend legislative amendments where necessary, to ensure that the new tax framework is both effective and efficient.

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The minister outlined five guiding principles for the committee's work, including fidelity to the law, growth-oriented design, clarity and certainty, broad stakeholder engagement, and international benchmarking, to guarantee a well-rounded and effective VAT Modification Order.

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Oyedele stressed that the VAT Modification Order should promote industrialization, investment, exports, innovation, food security, and energy transition, while maintaining the integrity of the VAT system and supporting Nigeria's economic aspirations.

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The committee has been given a six-week deadline to complete its assignment and submit a draft VAT Modification Order 2026, along with schedules of VAT-exempt and zero-rated supplies, implementation notes, and a stakeholder consultation report.

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The committee's membership comprises representatives from various government agencies and private sector organizations, including the Federal Ministry of Finance, the Nigeria Revenue Service, and the Manufacturers Association of Nigeria, bringing together a wealth of knowledge and expertise to inform the tax reform process.

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The minister noted that the diverse membership of the committee ensures a collaborative and inclusive approach to tax reform, leveraging the collective expertise of government and private sector stakeholders to create a more effective and efficient tax system.

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The Tax Reform Acts, which came into effect on January 1, 2026, aim to simplify Nigeria's tax system, improve the ease of doing business, boost investor confidence, and support sustainable economic growth, marking a significant milestone in the country's economic development trajectory.