The House of Representatives Committee on Finance has amended key provisions of President Bola Tinubu’s tax bill, addressing concerns raised by stakeholders during a public hearing in February. The revisions targeted contentious areas, including VAT rates, funding for government agencies, and taxation of free trade zones.
Among the notable changes, lawmakers rejected the proposed increase in Value-Added Tax (VAT) and scrapped the plan to discontinue funding for agencies such as the Tertiary Education Trust Fund (TETFUND), the National Information Technology Development Agency (NITDA), and the National Agency for Science and Engineering Infrastructure (NASENI) by 2030.
Presenting the revisions, Committee Chairman James Faleke noted that stakeholders had recommended a reduction of VAT to 5%. However, the committee opted to maintain the current 7.5% VAT rate, a decision the House has now officially adopted.
Additionally, lawmakers deleted the clause proposing an inheritance tax, scrapping plans to impose levies on inherited assets. The bill’s provision seeking to end statutory funding for NASENI, TETFUND, and NITDA was also removed.
Regarding free trade zones, the committee introduced a restriction requiring operators to limit exports to 75% and local sales to 25% in order to qualify for tax exemptions. This amendment aims to ensure that tax benefits are not exploited for domestic trade.
With these amendments, the revised tax bill now moves forward for further legislative approval.
