Nigerian Government Plans Zero-Rated Tax on Food Goods, Proposes VAT Increase

The Nigerian government, through the Presidential Committee on Fiscal Policy and Tax Reforms, has announced plans to impose a zero-rated tax on food items. This was revealed by Committee Chairman Taiwo Oyedele during a broadcast on Channels Television.

Oyedele explained that the aim is to reduce the impact of the Value Added Tax (VAT) on the country’s most vulnerable citizens. “Even the VAT system was placing too much burden on the poorest people. For example, you had food items, some of them were exempted. So we’ve decided that food should not just be exempted, it should be zero rated,” he stated.

In addition, Oyedele disclosed that preparations are underway to introduce a bill that would increase the VAT rate from 7.5 percent to 10 percent.

He made these comments on Tuesday, the same day that the Nigerian National Petroleum Company Limited (NNPCL) announced an increase in the pump price of Premium Motor Spirit (Petrol), raising it from N617 per litre to between N897 and N855.