The Arewa Consultative Forum (ACF) has recommended that the Value Added Tax (VAT) rate remain at 7.5% in Nigeria’s Tax Reforms Bills.
The recommendation was part of a detailed submission to the National Assembly on the Executive Tax Reforms Bills, which aim to overhaul the country’s tax laws.
A special committee of experts, set up by the ACF’s board of trustees, reviewed the bills before making its recommendations.
In a report signed by National Publicity Secretary Tukur Muhammad-Baba, the ACF stated that retaining the 7.5% VAT rate aligns with the economic realities faced by businesses and citizens.
The forum also urged improvements in VAT collection efficiency, the formalisation of informal sectors using digital technologies, and an expanded tax base through private sector investment.
Additionally, the ACF recommended the removal of VAT on agricultural equipment and the replacement of the terms “supply” and “supplies” with “consumption” in Chapter 6 of the Tax Administration Bill.
The forum called for a clear definition of the term “derivation” and proposed that its distribution be based on consensus among states, local governments, and the Revenue Mobilisation and Fiscal Commission (RMFC).
Furthermore, it advocated for reducing the powers of the Chief Executive Officer and Chairman of the Joint Revenue Board, arguing that the proposed provisions concentrate excessive authority in one individual.
The ACF suggested replacing the eight proposed coordinating directors with six executive directors, one from each geopolitical zone, to be nominated by the president and confirmed by the Senate.
It also recommended retaining TETFUND and NITDA by rewording Section 69 of the Nigeria Tax Bill as a Development Levy to be shared among TETFUND, NITDA, NASENI, and the Education Loan Fund.
The forum encouraged all stakeholders to participate in public hearings by the National Assembly committees, stressing the importance of contributing to laws that serve national interests.