Reported by: Oahimire Omone Precious | Edited by: Oravbiere Osayomore Promise.
The Federal Government has inaugurated an Inter-Ministerial Committee to develop the 2026 Value Added Tax (VAT) Modification Order, a major step towards ensuring the smooth implementation of Nigeria's new tax laws and providing greater certainty for businesses, investors, and tax administrators. Minister of Finance and Coordinating Minister of the Economy, Mr. Taiwo Oyedele, inaugurated the committee on Friday, July 24, 2026, at the Federal Ministry of Finance headquarters in Abuja, charging members to deliver a modern and practical VAT framework that reflects the intent of the Tax Reform Acts and responds to the realities of today's economy. The committee has been given a maximum of six weeks to complete its assignment and submit a Draft VAT Modification Order 2026, schedules of VAT-exempt and zero-rated supplies with their corresponding Harmonised System Codes, implementation notes, a stakeholder consultation report, and recommendations on any legislative amendments considered necessary.
The Tax Reform Acts, which came into effect on January 1, 2026, have been described by Oyedele as the most extensive changes to Nigeria's tax system in decades. He noted that the reforms simplify tax administration, improve certainty, strengthen competitiveness, protect vulnerable Nigerians, and create a stronger foundation for sustainable economic growth. While the previous VAT Modification Order made under the repealed VAT Act had served its purpose, the new legal framework requires a fresh Order to provide clarity, update relevant schedules, and support the effective implementation of the Nigeria Tax Act. “This is not about reproducing an old document,” Oyedele said. “It is about developing a VAT Modification Order that is clear, practical and responsive to the needs of a changing economy.” He explained that the new Order should remove uncertainty, make compliance easier for taxpayers, support investment decisions, and provide tax administrators with clearer guidance in implementing the law.
The minister directed the committee to undertake a thorough review of the legal framework, administrative practices, and policy directives governing VAT administration, particularly the VAT-exempt and zero-rated provisions contained in Part IV of the Nigeria Tax Act, 2025, while identifying areas that require further clarification. He also charged members to engage extensively with stakeholders across government, the organised private sector, professional bodies, and other interest groups to validate classifications, address implementation concerns, and ensure that the final recommendations are practical and balanced. Oyedele further instructed the committee to recommend a comprehensive schedule of VAT-exempt and zero-rated supplies, taking into account revenue implications, social impact, Nigeria's treaty obligations, and regional integration commitments. In addition, the committee is expected to prepare a clear and implementable VAT Modification Order that aligns with the provisions of the Nigeria Tax Act and, where necessary, recommend amendments to the Tax Reform Acts and other enabling laws to strengthen implementation.
The minister urged members to ensure that every recommendation remains faithful to both the letter and the spirit of the new tax laws, adding that the Order should encourage industrial growth, support investment, promote exports, strengthen food security, encourage innovation, and facilitate Nigeria's energy transition without compromising the integrity of the VAT system. He also stressed the need to reduce ambiguity in VAT administration so that taxpayers, investors, regulators, and tax administrators can operate with greater confidence and certainty. Oyedele further encouraged the committee to draw from international experience while ensuring that the final document reflects Nigeria's unique economic realities and development priorities.
According to a statement issued by Efe Ovuakporie, Head of Information and Public Relations at the Federal Ministry of Finance, the committee's membership comprises representatives from the Federal Ministry of Finance, the Nigeria Revenue Service, the Nigeria Customs Service, the Federal Ministry of Industry, Trade and Investment, the Joint Revenue Board, the Manufacturers Association of Nigeria, the Tax Advisory Committee, and the Tax Justice and Governance Platform. The Permanent Secretary of the Ministry of Finance, Mr. Raymond Omachi, has been named as the Chairman of the committee. The new VAT Modification Order is expected to provide much of the operational detail businesses will need to implement the new rules, replacing the previous VAT Modification Order issued under the repealed VAT Act and providing greater clarity on exemptions, zero-rated supplies, and implementation procedures under the new legal framework. The six-week timeline reflects the government's determination to move quickly in providing the regulatory certainty needed to support investment, simplify compliance, and strengthen Nigeria's tax system.
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