Six-week assignment to redefine VAT exemptions, strengthen implementation of Nigeria’s 2026 tax reforms
ABUJA β The Federal Government has inaugurated an Inter-Ministerial Committee to develop a new Value Added Tax (VAT) Modification Order, marking another key step in implementing Nigeria’s sweeping tax reform programme.
The committee was inaugurated on Friday by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele at the Federal Ministry of Finance headquarters in Abuja.
According to the Minister, the committee’s mandate is to produce a modern VAT Modification Order that aligns with the Tax Reform Acts, which came into effect on 1 January 2026, replacing the previous VAT modification framework.
“The Tax Reform Acts represent the most comprehensive reform of Nigeria’s tax system in decades,” the Minister said during the inauguration.
“They simplify our tax laws, improve certainty, enhance competitiveness, protect vulnerable Nigerians, and position our economy for sustainable growth.”
He stressed that the committee’s task is not to recreate the previous VAT Modification Order but to develop a forward-looking framework that complements the new legislation while supporting Nigeria’s economic transformation.
Key Responsibilities
The committee has been directed to review Nigeria’s current VAT administration framework and identify areas requiring clarification and policy refinement.
Its terms of reference include engaging stakeholders across the public and private sectors, developing comprehensive lists of VAT-exempt and zero-rated goods and services, drafting the new VAT Modification Order, and recommending legislative amendments where necessary.
The Minister said the committee’s work would be guided by five core principles: strict adherence to the law, growth-oriented policy design, clarity and certainty, broad stakeholder consultation, and alignment with international best practices.
“This Order should promote industrialisation, investment, exports, innovation, food security and energy transition without undermining the integrity of the VAT system,” he said.
Six-Week Deadline
The committee has been given six weeks to complete its assignment and submit a draft VAT Modification Order, schedules of VAT-exempt and zero-rated supplies with corresponding Harmonised System (HS) Codes, implementation guidelines, and a comprehensive stakeholder consultation report.
Membership of the committee cuts across key government institutions and the private sector, including the Federal Ministry of Finance, Nigeria Revenue Service, Nigeria Customs Service, Federal Ministry of Industry, Trade and Investment, Joint Revenue Board, Manufacturers Association of Nigeria (MAN), the Tax Advisory Committee, and the Tax Justice and Governance Platform.
The Minister described the composition of the committee as a blend of technical expertise and practical experience needed to deliver a robust policy framework.
Supporting Tax Reform
The inauguration forms part of the Federal Government’s broader effort to operationalise the Tax Reform Acts, widely regarded as the most significant overhaul of Nigeria’s tax administration in decades.
The reforms are intended to simplify tax administration, improve the ease of doing business, enhance investor confidence, broaden the tax base, and create a more transparent and competitive fiscal environment.
The proposed VAT Modification Order is expected to provide greater clarity on exempt and zero-rated supplies while ensuring that the country’s indirect tax regime supports economic growth without imposing unnecessary burdens on businesses and consumers.