Reps Retain 7.5% VAT, Reject Proposed 15% Increase by 2030

The House of Representatives has upheld the 7.5% Value Added Tax (VAT) rate, dismissing a proposed gradual increase to 15% by 2030. It also rejected the reintroduction of inheritance tax under the guise of family income taxation.

Key Highlights of the Tax Reform Bills:

The Nigeria Revenue Service (NRS) Bill will focus on federal revenue collection, with a 4% cost-of-collection rate and restricted borrowing powers requiring government approval.

The Joint Revenue Board (JRB) Bill enhances the Tax Ombud’s independence and ensures the Tax Appeal Tribunal (TAT) operates separately from the Federal Inland Revenue Service (FIRS).

Taxpayer Identification Number (TIN) processing will now take five working days instead of two, while companies ceasing operations must file returns within three months (previously six).
Petroleum Gains Tax reduced from 85% to 30%, and excise duty provisions were removed due to economic concerns.
Higher turnover threshold for small businesses: Now classified as small if annual turnover is ₦100 million or less.

New penalties for Virtual Asset Service Providers (VASPs), including stricter fines and potential license suspensions for non-compliant crypto and digital asset businesses.
Judicial oversight on asset seizure: Tax authorities must now obtain court orders before confiscating assets.

The amendments impact several laws, including the Companies Income Tax Act, VAT Act, Personal Income Tax Act, Petroleum Industry Act, and more. The House will deliberate further on the report in the coming weeks.