The Federal Government has begun a review of Value Added Tax (VAT) exemptions and zero-rated supplies under Nigeria’s new tax regime with the inauguration of an inter-ministerial committee to prepare the 2026 VAT Modification Order.
The initiative is aimed at supporting the implementation of the Tax Reform Acts, which took effect on January 1, 2026, by providing greater clarity for businesses, investors and tax administrators.
Inaugurating the committee on Friday, the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, tasked members with developing a practical VAT framework that aligns with the objectives of the new tax laws and reflects the realities of Nigeria’s evolving economy.
Oyedele described the Tax Reform Acts as the most significant overhaul of the country’s tax system in decades, saying the reforms are intended to simplify tax administration, improve compliance, enhance competitiveness, protect vulnerable citizens and promote sustainable economic growth.
He noted that while the previous VAT Modification Order served its purpose under the repealed VAT Act, a new order is required to provide clarity and facilitate the implementation of the Nigeria Tax Act.
“This is not about reproducing an old document. It is about developing a VAT Modification Order that is clear, practical and responsive to the needs of a changing economy,” he said.
According to the minister, the new order should eliminate ambiguity, simplify compliance for businesses, support investment decisions and provide tax administrators with clearer implementation guidelines.
The committee has been mandated to review the legal and administrative framework governing VAT, with particular attention to VAT-exempt and zero-rated provisions contained in Part IV of the Nigeria Tax Act, 2025. It will also identify areas requiring clarification and engage stakeholders across government, the organised private sector, professional bodies and civil society before submitting its recommendations.
Among its responsibilities is recommending an updated schedule of VAT-exempt and zero-rated goods and services, taking into account revenue implications, social impact, Nigeria’s treaty obligations and regional integration commitments.
The panel is also expected to prepare a VAT Modification Order that aligns with the Nigeria Tax Act and propose amendments to the Tax Reform Acts and other relevant laws where necessary to strengthen implementation.
Oyedele urged members to ensure their recommendations support industrialisation, investment, exports, food security, innovation and Nigeria’s energy transition while preserving the integrity of the VAT system.
He also encouraged the committee to draw on global best practices while ensuring the final framework reflects Nigeria’s economic realities and development priorities.
The committee has six weeks to submit a draft VAT Modification Order, schedules of VAT-exempt and zero-rated supplies with their corresponding Harmonised System Codes, implementation notes, a stakeholder consultation report and any proposed legislative amendments.
Its membership includes representatives of 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.
Expressing confidence in the committee, Oyedele said its blend of public and private sector expertise would help deliver a practical framework that strengthens VAT administration and supports the Federal Government’s broader fiscal reform agenda.
“Nigerians cannot wait. Businesses need certainty. Investors need confidence. Government needs a VAT system that is easy to administer and supports growth,” he said. “I urge you to approach this assignment with diligence, objectivity and a sense of urgency.”
