President Bola Tinubu’s government has revealed fresh plans to introduce tax in the lottery, gambling and telecommunication industries.
Politics Nigeria reports that the presidency had earlier unveiled a plan to increase the Value Added Tax (VAT) rate which currently stands at 7.5 percent.
As it stands, a new VAT rate of 10 percent will be announced by the federal government in 2025.
The recently releases IMF Staff report on Nigeria provided details on this issue and other initiatives by the Federal Government to shore up revenues and reduce the fiscal deficit going forward.
According to the report, the federal government targets an increase in the VAT rate from 7.5 percent to 10 percent in 2025 and to about 15% by 2026.
The proposed increase in VAT rate would be accompanied by input credits to services and assets, a reduction in Corporate Income Tax (CIT), and an increase in excise duties for tobacco and alcohol.
The report partly reads: “Excises on telecommunications, lotteries, and gambling are under consideration but have been delayed. The authorities’ planned reforms in 2025 include raising the VAT rate—while introducing input credits for services and assets—increased excises on tobacco and alcohol, and rationalization of tax incentives accompanied by a reduction of the corporate income tax (CIT) rate to enhance competitiveness.”
The report noted that the Federal Government hopes to reduce revenue collection by Ministries, Departments, and Agencies (MDAs) and transfer the responsibility to the Federal Inland Revenue Service (FIRS).
The IMF recommended that these fiscal initiatives will be finalised and implementation started alongside the 2025 budget.
Meanwhile, the House of Representatives has directed the Central Bank of Nigeria to halt the controversial cybersecurity levy.
