The Federal Government has established an Inter-Ministerial Committee tasked with developing the 2026 Value Added Tax (VAT) Modification Order, a critical step in bolstering the implementation of Nigeria’s ambitious tax reforms. This initiative underscores the government’s commitment to aligning fiscal policy with current economic realities and fostering a more predictable tax environment for businesses and investors.
The committee was inaugurated in Abuja on Friday by the Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele. According to a statement from the Federal Ministry of Finance, the committee’s mandate is to craft a practical VAT framework that reflects the objectives of the recently enacted Tax Reform Acts, which came into effect on January 1st. These acts represent the most significant overhaul of Nigeria’s tax system in decades, aiming to simplify administration, enhance certainty, improve competitiveness, and promote sustainable economic growth.
The necessity for a new VAT modification order arises from the repeal of the previous VAT Act. The forthcoming order is intended to provide much-needed clarity, update relevant schedules, and offer robust support for the effective implementation of the Nigeria Tax Act, 2025. Minister Oyedele stressed that the committee should move beyond mere replication of the previous order, instead producing a clear, practical, and responsive framework designed to reduce uncertainty, simplify compliance, and strengthen guidance for tax administrators.
Key directives for the committee include a comprehensive review of the legal, administrative, and policy frameworks governing VAT. They are specifically tasked with examining VAT exemption and zero-rated provisions under Part IV of the Nigeria Tax Act, 2025. To ensure the recommendations are practical, balanced, and widely accepted, the committee is mandated to engage extensively with government agencies, private sector operators, and professional bodies.
Furthermore, the committee is expected to propose comprehensive VAT exemption and zero-rated schedules, carefully considering revenue implications, social impact, and Nigeria’s regional and international obligations. The ultimate goal is to prepare an implementable VAT Modification Order that is fully aligned with the Nigeria Tax Act, with recommendations for legislative amendments where necessary to enhance implementation. The minister also highlighted the importance of the committee’s work in supporting industrial growth, investment, exports, food security, innovation, and the energy transition, while crucially eliminating ambiguity and bolstering confidence among taxpayers, investors, and regulators. Adopting global best practices while reflecting Nigeria’s development priorities is also a core expectation.
The committee has a six-week deadline to submit a draft VAT modification order and implementation recommendations. Membership comprises representatives from the Ministry of Finance, the Nigeria Revenue Service, the Nigeria Customs Service, and other public and private institutions, ensuring a multi-stakeholder approach to this vital fiscal reform.
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