Nigeria's Parliament Approves Tax Reform Bills, VAT to Rise by 2026

The Nigerian House of Representatives has approved a series of tax reform bills proposed by President Bola Ahmed Tinubu, marking a significant step towards overhauling the country's tax system. Although the bills aim to modernize tax mechanisms and address Nigeria's low tax-to-GDP ratio, key proposals were diluted during the legislative process, including a decision to retain the Value Added Tax (VAT) at 7.5% instead of increasing it to 15%. Lawmakers also rejected the introduction of an inheritance tax and a reduction in the company tax rate, which were part of Tinubu's broader plan to enhance government revenue. The approved bills include replacing the petroleum profit tax with a 30% corporate tax on oil gains and implementing a global minimum tax for multinational corporations. While the bills await passage in the upper house, their implementation is contingent on presidential assent. The approval reflects ongoing tensions between the federal government and powerful state governors regarding tax revenue distribution.