Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, has disclosed plans to recommend the removal of Value Added Tax (VAT) on select basic food, educational, and healthcare items. Oyedele made this announcement via his social media handle, clarifying comments made at a policy exposure and impact assessment session organized by the committee.
Addressing concerns about potential VAT rate hikes, Oyedele emphasized that the committee’s proposals aim to alleviate the financial burden on businesses and protect vulnerable segments of the population. Among the key recommendations outlined by Oyedele are:
- Full input VAT credit for businesses to reduce operating costs and alleviate cash flow strains.
- Removal of VAT on an expanded list of basic food, educational, and healthcare items to shield low-income individuals from taxation.
- Harmonization of consumption taxes into a single VAT system and adjustment of revenue-sharing formulas to benefit states and streamline tax administration.
- Elimination of VAT on the export of services and intellectual property to stimulate non-oil exports.
- Increase in the threshold for VAT exemption for small businesses to support their growth.
- Enhancement of the VAT refund process to alleviate pressure on businesses’ working capital.
- Introduction of VAT fiscalization and electronic invoicing to combat tax evasion and ensure a level playing field for honest businesses.
These proposals reflect the committee’s efforts to promote fiscal efficiency, encourage non-oil exports, and enhance the competitiveness of businesses. By targeting VAT exemptions on essential items and implementing measures to streamline tax administration, the committee aims to create a more conducive environment for economic growth and development.
